In the first statement coming out of Labour election headquarters, current U.K. Business Secretary Peter Mandelson has put up an argument stating that the sitting government has the constitutional right for the “first go” in trying to remain in power when no party wins a majority in the House of Commons.

“The rules are, if it’s a hung parliament, it’s not the party with the largest number of seats that has the first go, it’s the sitting government,” Mandelson said. “After three terms in office, of course many people have turned away from the Labour Party but they haven’t embraced the Conservatives.” He added

According to a recent survey, manufacturing output and exports in the UK expanded at their fastest rate in 15 years. These findings meant that whichever party eventually wins the right to govern in the UK, are liable to inherit an economy already showing signs of recovery with manufacturing output growing by as much as two percent in the past three months. A growth level that suggests the manufacturing sector will make a significant contribution to second-quarter gross domestic product growth in the UK.

Recent figures also show that the next government are set to inherit a jobs market that, while currently still looking a little weak, looks is poised for recovery but still fragile. Unemployment stands at 2.5 million, or eight percent of the work force, far below the three million-plus predicted last year.

Channel 4 announced the public service broadcaster would boost the budget of its film division by a fifth this year to 10 million pounds. The decision returns Film 4’s budget to its 2007 level before the recession, and partly reflects a cautious confidence at the group. Chief executive David Abraham said the Digital Economy Act had also influenced the decision to increase investment in Film 4. The Act formally stated that as part of its public service remit, Channel 4 should make "high quality films" for cinema release in the UK.

Alliance Boots has replaced Marks & Spencer at the top of an annual ranking of UK companies by the strength of their corporate reputation. Boots, which enters the Reputation Institute’s UK Pulse Report for the first time, ranks first in the survey that measures corporate reputation among the general public. Other companies in the top 10 include Cadbury, Morrisons and Rolls Royce, with John Lewis Partnership, Debenhams, Sainsbury’s and Tesco among the top 20 places. In broadcasting, the BBC came ahead of ITV and BSkyB, and HSBC has become the top-ranked bank. Companies are selected by the organization based on revenue and visibility among the general public, but can decide whether or not to be included. There is no fee for inclusion.

Followers of Google’s UK-based email will now be able to have @gmail.com addresses, rather than @googlemail.com. The news comes after the search engine marketing giant won an arduous trademark battle with a British research company that had applied for the "gmail" name prior to Google launching its email service. After finally reaching a settlement, Google are now able to offer users that registered after 2005, a change to the shorter address of @gmail.com Google went on to use the @googlemail.com address for those that had registered after this time.

A spokesman for Google stated that the company was satisfied with the conclusion of the proceedings, saying:”We know how important email accounts are to users and we wanted to provide the best user experience possible. We engineered the infrastructure to enable users to switch their accounts to @gmail.com accounts should they choose, as well as directing all new users to set up @gmail.com accounts in the UK.”

Power and oil firm Essar Energy were left wishing that they had timed their entry onto the FTSE a little better than this week, after suffering the worst debut of a big London flotation since the early noughties. The group’s shares plummeted 7.2 percent to 389.5 pence on its first day of trading. The fall from the UK’s largest stock market listing in more than two years is the worst seen since HMV, the music retailer, dropped 7.5 percent in May 2002. Essar’s listing came on a challenging day for the markets, with the FTSE 100 index closing down 2.5 percent on the day

The Euro remains under heavy pressure, falling to below 1.27 against the dollar. The pound strengthened took a late slump against the dollar to 1.463 and at 1.550 against the Euro.

International rating agencies continue to voice concerns over the crisis of confidence which is spreading across Europe, with countries such as Portugal, Italy, Spain, Ireland and Britain looking unstable, as the public and politicians in Athens attempt come to terms with the harsh economic conditions which have come with the EEC and IMF bail-out. The European Commission has said it expects the Greek economy to shrink by 3% this year, amid continued market jitters over the country’s debt crisis.

Banking systems still face "very real, common threats" if doubts were raised about their governments’ abilities to pay debts.

Fears of another round of instability meant another volatile session for the FTSE 100 index, which saw it shed 80.9 points to close in 5261 as the UK also went to the polls, with the prospects of a hung Parliament looking very much a reality.

US mortgage giant Freddie Mac announced a loss of $8 billion (£5.3 billion) for the first three months of 2010. Reports from the company hint that they are liable to ask for a further $10.6 billion in state aid. The firm has made a number of federal cash requests since it was taken over by regulators in September 2008, whilst stating that as the US housing market has not yet fully recovered they would continue to be in need of continued government funding. If the latest request is granted, it will bring the total cost of the Freddie Mac rescue to $61.3 billion.

Stock exchange bosses and regulators were last night scrambling to explain the cause of a plunge in the Dow Jones Industrial Average, which took the index down by the largest number of points in its history, setting off a short term panic in an already fragile financial market.

A little over an hour before the close of trading in New York. The result was a period of unprecedented chaos that also dragged in currency and credit markets. At 2.20 pm, EPT the Dow stood at 10,460, already down 400 points, when it suddenly tumbled 600 points with the space of just seven minutes to 9,869, a drop of 9.2 per cent, the largest points fall ever.

The Dow snapped back but continued to swing wildly until the close of trading, when it settled at 10,520.32, down 347.80 points on the day, a fall of 3.2 per cent. The NASDAQ also closed down 82.65 points to 2319.64.

US productivity grew at a better-than -expected annual rate of 3.6% in the first quarter of 2010, while a separate report showed that applications for jobless benefits dropped for a third week in a row.

The US economy has been growing since last summer, but firms have been reluctant to take workers back on, instead pushing smaller workforces to produce more, which has increased productivity – measured as the amount of output per hour of work.

Carmaker BMW has reported a return to profit compared with a year earlier and given an upbeat forecast for sales in the coming year.

The group reported a net profit of €324 million (£277 million) for the first quarter of 2010, compared to a loss of €150 million for the comparative period last year. Turnover was up 8% to €12.4 billion with the company reporting a 100% increase in sales in China as it did a year earlier

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Tags: Alliance Boots, Banking, BBC, BMW, British Economy, British Pound, BskyB, Cadbury, Channel 4, Conservatives, Credit Crunch, Currency, David Abraham, Debenhams, Digital Economy Act, Dow Jones, Economics, Economy, election, Employment, Essar Energy, Film 4, Financial News, Freddie Mac, FTSE, Google, Government, HMV, House of Commons, HSBC, ITV, John Lewis Partnership, Labour party, Marks & Spencer, Money, Money Markets, Morrisons, NASDAQ, Peter Mandelson, Recession, Retail, Rolls-Royce, Sainsburys, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Unemployment

The International Monetary Fund (IMF) has stated that governments must act to curb the increasing power of banks in the aftermath of the financial crisis. The IMF has called for cooperation from governments to set out future financial regulatory reform agenda, whilst stressing that some of the "too-big-to-fail" institutions had been made even stronger by the financial crisis. The IMF went on to warn that the large government financed deficits run-up during the financial crisis could pose a risk of starting a second credit crunch.

Proposals from the IMF include imposing two new taxes on banks in order to raise funds to pay for potential future bailouts and to penalise excessive profit-making. UK Chancellor Alistair Darling was reported as having welcomed the proposal:

Recent reports show that the number of Britons buying a home for the first time fell to the lowest in almost two decades as tighter lending conditions curbed people’s ability to purchase property. Some 347,000 first-time buyers took out a home loan in the year through February, less than half the peak figure of 700,000 recorded in the period from 2004 to 2005. Reasons given largely include the bank’s policy of squeezing credit as they seek to rebuild their balance sheets To aid first-time buyers, the government last month scrapped a tax on house purchases for those spending less than £250,000 pounds ($384,000) which help a few buyers, However many don’t have the 25 percent deposit lenders that lenders now demand

Official data released on Wednesday showed that the number of people in the U.K. claiming jobless benefits has fallen further than anticipated in March. Overall unemployment rose above 2.5 million, reaching its highest level for more than 15 years. The data drew conflicting responses from the main parties ahead of the May 6 general elections. The Office for National Statistics said the number of people receiving jobseekers allowance fell 32,900 in March to 1.54 million, the fourth decline in five months.

Britain’s largest supermarket chain Tesco has announced plans to l create 16,000 jobs this year, after the company announced a 10 per cent rise in profits for 2009. Tesco pledged 9,000 new jobs for the UK as they confirmed pre-tax profits of £3.2 billion for the financial year to 27 February 2010. 2009

saw a record turnover of £56.9 billion for the retailer, which have now almost trebled in size over the past decade and currently employs 460,000 people in 14 countries. . The company’s non-food business generated £9 billion in UK revenues alone

In a bid to expand their share in Europe’s growing market for the auto rental service, the American company Zipcar Inc. has announced that they are to acquire UK car-sharing peer Streetcar Ltd. The acquisition, valued around $50 million, will give Zipcar a larger presence in the U.K., where Streetcar is the biggest car-sharing company,

Zipcar began operating in London in 2006 and has 12,000 U.K. members who pay a fee to rent cars by the hour or day while Wimbledon based Streetcar, based in Wimbledon, has 50,000 members in the U.K. Its revenue last year was about $25 million.

Online fashion retailer ASOS have announced that they anticipate profits of around £20 million pounds ($32.09 million) after an increase of turnover of around one third to £223 million for the year to the end of March. A spokesman for the company announced "another excellent year" and that ASOS are approaching this year with considerably more confidence."

Tui Travel announced that they have raised £500 million of fresh financing in anticipation of cash flow problems in the wake of travel disruption caused by the volcanic ash cloud. The holiday operator warned yesterday that it was losing up to six million pounds a day. A spokesman for the company said the new finance would be largely used to "exploit its strong pipeline of attractive acquisition opportunities". Analysts said the finance would also allow Tui Travel to partially repay a £600 million pound loan that they took from Tui AG, the German travel group who are majority shareholders in Tui Travel.

Sterling rose to a two-month high against the euro and advanced against the dollar on Thursday after the minutes of the Bank of England’s policy meeting earlier this month showed a more positive outlook. The pound closed against the dollar on 1.5388 while the Euro stood at 1.1157

London’s FTSE 100 failed to keep intraday gains on Wednesday as a recovery rally among banks faded coupled with concerns about the potential impact of the disruption caused by the volcanic eruption in Iceland on the recovering economy.

London’s benchmark index fell 62 points, to 5,665.33, turning round from modest opening gains as financial stocks joined resource companies at the bottom of the market.

US President Barack Obama has again attacked critics of his banking reforms. In a speech which warned that without change the financial crisis will be repeated, Obama pointed out that reckless practices and financial firms that acted like "bandits" should never be allowed to operate again.

Regulatory reform was in the financial sector’s interests, the president said adding that "bankers and lobbyists should not fight against it ".

President Obama made his speech to an audience of bankers and financial experts in New York

US stock prices dropped on Thursday after rising on Wednesday morning, boosted by earnings results from Apple that smashed analyst expectations, with Morgan Stanley and Boeing also posting higher than anticipated first-quarter figures. The Dow Jones Industrial Average closed on 11,134.29 while the Nasdaq Composite was up on 2,509.10.

Apple led the technology stocks in the Dow higher, rising 6.3 per cent as the company reported a 90 per cent increase in second-quarter profit and a 49 per cent increase in revenue after the session’s close on Tuesday, far surpassing analysts’ estimates. The consumer technology products group had been expected to record sales of around $12 billion; instead, it reported sales of $13.5 billion in the first quarter.

Software giants Microsoft announced a profits leap by 35% in the first three months of 2010, largely due to the continued success of their Windows 7 operating system. Microsoft’s net profits for the quarter of £2.6 billion ($4 billion) were also attributed to "strong growth" from its Bing search engine business and XBox Live. Sales hit a record $14.5 billion, up 6% on the same period in 2009.

Doing less well were Yahoo, whose share dropped by almost five percent as the search engine provider forecast lower-than-expected second-quarter sales citing losing market share.

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Tags: Alistair Darling, Apple, ASOS, Bank, Bank of England, Banking, Bing, Boeing, British Economy, British Pound, Dow Jones, Economics, Employment, Financial News, FTSE, International Monetary Fund, Microsoft, Morgan Stanley, Office for National Statistics, Retail, Streetcar Ltd, Tesco, UK Banks, UK Economy, UK government, Unemployment, Windows 7, Xbox Live, Zipcar Inc

Prime Minister Gordon Brown has publicly set a national election for May 6 which looks like being one of Britain’s toughest to call for many years, as well as Brown’s first as leader of the Labour Party. Brown made this long anticipated announcement after meeting with Queen Elizabeth II. The Labour Party is expected to face a tough election battle against the Conservative Party led by David Cameron, who enjoys a lead in opinion polls. The Labour Party has been in power since Tony Blair’s landslide victory in 1997.

In the meantime the show must go on, and Prime Minister Gordon Brown has done so holding successful negotiations with German Chancellor Angela Merkel over the issue of setting a "global responsibility levy" on banks. Brown confirmed that Britain, France and Germany were broadly all in agreement on the need for a levy, which could cost the financial sector billions of pounds a year. They are now seeking U.S. support for the proposed new tax on banks. Gordon Brown did stop short of revealing how much the tax they expected to raise from British banks, while Merkel was not so reticent. The German Chancellor predicted that her government would raise around one billion pounds from German banks, while going on to conceded that the ongoing problems in the banking sector had yet to be fully resolved.

According to one of the UK’s largest employment agencies, demand for new workers fell last month, leading to concerns over a rise in unemployment. A spokesman for the agency did point our however that demand for qualified accountants and strategic consultants is now at its highest level since d last year. Unemployment has been stable in recent months, at around 2.45 million. Economists have warned that the figure could peak at 2.8 million this year.

European house price values apparently fell on average in 2009 for the first time in over a decade. The FT Europe Index, which covers the 23 countries on the European mainland, reported a 2.8 percent decline in value for the years, while statistics issued in the FT Eurozone Index, which covers 16 nations Eurozone member group showed a 4.6 percent fall. House prices fell on average more than seven percent in the larger, more developed countries such as British, Spain, France and Germany. However recent data covering the last quarter of 2009 suggests that the big four European countries may be past the worst of the property value decline, registering marginal growth in the fourth quarter compared with the third.

As cabin crew staged two four-day strikes last month, seven key British Airways executives were walking away with share options with a combined value of almost three million pounds. The awards were for shares worth £2.50 pounds each. The executives will be allowed to exercise their options only if pre-agreed performance targets are met.

American billionaire Wilbur Ross has reportedly acquired a stake in Sir Richard Branson’s Virgin Money. With the announcement coming just days ahead of its bid for a national branch network being sold by the Royal Bank of Scotland. The US tycoon, known for his corporate td investments in steel, oil, banking and utilities, paid about £ 100 million for 21 per cent of Virgin Money, designed to bolster the company’s ambitions to create a national high street chain of banks.

Tesco, who already offer a wide range of financial products to their existing customers, are reported to be having their eye on capturing around 10 percent of the financial services market in the UK, with current accounts and mortgages expected to be available over the next year. If Tesco’s plans bear fruit, it could make them similar in size to Abbey, owned by Santander.

A recent annual audit of UK retail and leisure parks has revealed that twenty percent of the retailers who agreed to pay rent in excess of £100 pounds per square foot are either in administration or tied into company voluntary arrangements. The findings come despite evidence that the retail sector increased floor space requirements by 0.4 percent last year.

On the money markets, due to ever increasing optimism, the US dollar was up almost a cent against the euro, with a dollar worth 74.8 eurocents. The dollar was also up almost half a penny against the pound, at 65.7 pence.

The pound continued to remain above the $1.50 mark at $1.5247, whilst gaining slightly against the Euro to close on 1.401

The FTSE 100 returned from the holiday weekend in semi-buoyant mood up 35.46 points to close on 5780.35

On the first day of its launch in the US, computer hardware giants Apple announced that they had it sold more than 300,000 of its latest baby, the iPad tablet computer. The figures for Saturday’s bookings included pre-orders of the device, as well as sales at Apple stores across the country. The news of the successful launch set Apple Inc shares up 1.1% to a record closing high of $238.49 on Monday. The iPad is expected to be on sale in parts of Europe, Canada and Australia by the end of this month, and will retail in the US at between $499 $829 (£328 to £545), dependant on specifications, with European prices yet to be announced. According to an objective survey, the vast majority of the iPad’s 300,000 launch-day sales went to current Apple product owners.

Wall Street returned after the holidays a little groggy, with Dow Jones down, but just by 3.56 points to 10969.99. The NASDAQ rose a little, 7.28 points to 2436.81.

Meanwhile, the US transport department has confirmed that they will be demanding a record fine of $16.4 million (£10.7 million) from auto maker Toyota for withholding information about problems they had been having with faulty accelerator pedals. The department says the company failed to notify it about the flaws "in a timely way" with the National Highways Traffic Safety Administration (NHTSA) said documents provided by Toyota showed the carmaker knew about the defect in September. Reports of problems with the pedals prompted a massive recall in January. Toyota was given two weeks to appeal against this penalty.

Possibly as a result of problems in the Japanese car industry, German car exports were reported to have risen by more than fifty percent in March compared with a year earlier. However official figures have shown that domestic car sales fell by a quarter in the month, compared to 2009.

Germany exported 419,400 cars in March, while overseas orders for future deliveries were up by more than 28%. Domestic sales fell by 27% to 295,000 as demand fell due to the end of the country’s car scrappage scheme, which closed in September last year.

Oil prices have risen amid growing optimism that improved US job creation will boost economic recovery and lead to higher demand for crude. The price of oil reached a fresh 18-month high on Tuesday on growing hopes of a US-led global economic recovery. US light crude hit $86.84 a barrel in New York trading, while Brent crude peaked at $86.15.

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Tags: Angela Merkel, Bank, Banking, British Economy, Credit Crunch, David Cameron, Dow Jones, Economics, Economy, Employment, Financial News, FT Europe Index, FT Eurozone Index, FTSE, global responsibility levy, Gordon Brown, iPad, Money, Mortgage, NASDAQ, National Highways Traffic Safety Administration, Retail, Richard Branson, Royal Bank of Scotland, Santander, Toyota, UK Banks, UK Economy, UK Election, UK government, UK Recession, Unemployment, Wilbur Ross

U.K. Prime Minister Gordon Brown said Monday that his government has identified billions of pounds in additional efficiency savings in the public sector to help pare the country’s record deficit. Mr. Brown said the government can deliver £12 billion ($19.7 billion) in efficiency savings over the next four years, an increase on the target £9 billion that the Treasury had identified in April. Brown’s announcement comes ahead of Wednesday’s Pre-Budget Report, which will map out some measures to cut the budget deficit. Among the measures that have been considered is a tax on bankers’ bonuses and even on the banks themselves. However the issue of a windfall tax on banks or bonuses presents Brown and Chancellor Darling with a serious dilemma as they leave no stone unturned to raise cash without damaging the economy’s return to growth. Eroding banks’ profits to raise fiscal income might weaken these institutions just as the government is trying to provide increased more capital behind them to cover lending to Britain’s credit-starved companies.

Manufacturing output in the UK between September and October was unchanged against expectations for a 0.4 per cent increase. UK house prices rose 1.4 per cent month on month in November – stronger than forecast. The two pieces of news appeared to cancel each other out and sterling and gilts seemed little affected.

U.K. Chancellor of the Exchequer Alistair Darling is expected on Wednesday to announce a cut in taxes on the use of electric vehicles as company cars as part of efforts to present an environmentally friendly pre-budget report. A U.K. treasury spokesman predicted that from 2012, companies and employees would be exempted from paying taxes on company cars if they were electric vehicles.

Shares in UK government majority owned Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc, dropped after Chancellor of the Exchequer Alistair Darling refused to rule out a tax on excessive bonus payments. Royal Bank of Scotland retreated 4.7 percent to 33 pence and Lloyds Banking tumbled 4.1 percent to 53.69 pence.

Andrew Bailey, executive director for banking services at the BOE, has stated the bank’s fears that U.K. consumers are hoarding cash due to their lack of confidence in the banking system. Another factor that strengthens the banks theories are the negligible interest that they would earn even if they did invest their money with a financial institution. In a speech made in Washington D.C., Bailey highlighted the ironic connection between the declining need for cash in everyday life and the sharply increasing demand for banknotes during the financial crisis and ensuing recession.

According to a recent report issued by the Engineering Employers Federation, U.K. factory production will begin growing again next year as exports rebound, Production is expected to grow 0.9 percent in 2010 after it had shrunk by 10.4 percent in 2009. The report went on to add that increasing signals point to the fact that the U.K. is emerging from the longest recession on record. The British Chambers of Commerce pointed out that although the recovery has started the Bank of England will probably be required to maintain its bond purchase plan at £200 billion pounds ($331 billion) while it assesses the strength of signs of a rebound.

Shares in travel companies are on the rise, with the Thomas Cook Group and TUI Travel leading the way. Thomas Cook, Europe’s second-biggest tour operator, jumped 1.9 percent to 221.2 pence, while TUI Travel, Europe’s largest tour operator, rose 1.5 percent to 250.5 pence.

Shares in the U.K. waste recycling company Shanks Group Plc surged forward 43 percent to 128.5 pence after the company revealed that they had received a possible bid offer from an unidentified private equity group. Washington-based private equity firm Carlyle Group, have been reported to be in talks to buy the British waste-disposal company Shanks for about £535 million ($875 million) for some time.

Sterling lost ground on Tuesday as disappointing economic data and concerns over the UK government’s pre-Budget report weighed on the currency,

• Pound/US dollar 1.6292
• Pound/Euro 1.1040

London equities continued to weaken on Tuesday, with renewed concern about the financial problems in Dubai. Banks especially were hard while talks continued between Dubai World and the creditors to restructure debt at the holding company. It is expected that a group of banks, including the Royal Bank of Scotland, Standard Chartered, HSBC, Lloyds Banking Group as well as two from the United Arab Emirates (UAE) will form a steering committee to be appointed to represent creditors. At the end of the day’s trading, the FTSE 100 had tumbled 1.5 per cent to close on 5,230.5,

According to Federal Reserve Chairman Ben Bernanke the US economy is improving, although it is still too early to say that the recovery will last.

Unemployment could stay "elevated", although inflation is likely to remain subdued, while interest rates were likely to stay low for "an extended period",

Following Bernanke’s comments, the dollar lost a lot of the recent gains it had made against the euro.

On close of trading, the Dow Jones Industrial Average had dropped 104.82 points to 10,285.292 and the NASDAQ was also down 19,65 points to to 2,169.96

President Obama has said that money not spent under the £425 billion ($700 billion) US bank bail-out package could be used to cut the US deficit and boost jobs. The cost of the "Troubled Asset Relief Program" (Tarp) had turned out to be "much cheaper than expected". Reports say the cost of the Tarp will be £120 billion below the Treasury estimate. Back in August, the Obama administration had estimated that the rescue package would be £200 billion.

Crude oil dropped for a fourth day, trading below $75 a barrel, as the dollar gained amid speculation the U.S. Federal Reserve will start raising interest rates.

The China Association of Automobile Manufacturers announced that Chinese car sales and production both exceeded 12 million between January and November, with expectations that car sales and output will to top 13 million for the full year.

Production of new cars has never topped the 10 million cars in one year mark in the past with state incentives having boosted car sales. The Chinese government has reiterated their plans to continue economic stimulus measures into 2010, Despite the downturn and falling sales at most global car makers, demand for cars in China continues to boom.

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Tags: Alastair Darling, Asset Relief Program, Bank, Banking, Ben Bernanke, British Economy, British Pound, Chancellor of the Exchequer, Credit Crunch, Crude oil, Currency, Dow Jones, Dubai World, Economics, Economy, Employment, Engineering Employers Federation, Financial News, Gordon Brown, HSBC, Lloyds Banking Group Plc, Money, Money Markets, NASDAQ, pre-Budget report, Recession, Royal Bank of Scotland Group Plc, Shanks Group Plc, Standard Chartered, Stock Markets, Stocks and shares, Thomas Cook Group, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy

The UK looks like being in the financial doldrums for years to come, largely due to placing too much faith n the financial service sector and not enough on building up the heavy to medium sized industries that once made Britain Great. Financial experts are now convinced that that the reasons why the UK is taking longer than their European rivals to move out of the recession is too much of an emphasis been placed on saving the banks and too little on pushing industry forward as the French and German governments succeeded in doing. The mood on the street is that Britain has got to get a grip on its public finances.

This mood is emphasized by recent statements made by head of the Confederation of British Industry General Richard Lambert who reminded all of us that didn’t know it that how to reduce the 175 billion pound deficit will become a major battleground ahead of the next election, due next year, which the Conservatives are expected to win. General Lambert did point out that in his opinion there is very little to choose between both main parties’ deficit-reduction plans.

Meanwhile public borrowing in 2009 is almost treble what it was the previous t year with some analysts even forecasting that could even surpass the government’s forecast of £175 billion pounds, equivalent to no less than 12 percent of GDP. Chancellor Alistair Darling, who for some reason thinks he will be around to make it happen, has pledged to halve the deficit within the next four years and to even balance the budget by 2018, although he has yet to explain how.

What does appear likely to happen in the near future is that the UK Financial Services Authority (FSA) begins responsibility for financial stability as well as market regulation, consumer protection and investigating financial crime in the UK. Under a new bill that entered Parliament yesterday, to be known as the. Financial Services bill, a formal three-member Council for Financial Stability will be created. The council will consist of the finance minister, the governor of the Bank of England and the head of the FSA, who will be jointly responsible for overseeing UK financial stability. The Treasury will also start be held responsible for publishing annual reports on the stability of the UK financial system. The FSA will also gain long awaited veto power over bankers’ pay arrangements. This new authority will allow them to act if they believe that a bank employee’s contract would damage the bank’s risk management.

A recent survey has predicted that it may take until 2014 for UK property prices to return to the levels they peaked at in 2007 peak, the height of the country’s biggest housing boom.

After a surprise rebound this year, the survey predicts that U.K. house prices will probably fall next year, with predictions of an average drop of about 1.6 percent being bandied about.

The 7 percent gain in average prices in the UK that have been going on since April were driven by a shortage of properties for sale and are unlikely to be sustained, while Britain’s longest recession on record fuels unemployment and makes banks hesitant to lend.

National Grid, the company that operates electricity and gas networks in the UK as well as in the US, has reported a 16 per cent rise in underlying pre-tax profit for the six months to the end of September. The rise comes despite a steep fall in energy use, demonstrating what the company describes the success of their extremely low risk business model. Pre-tax profits, were £649 million in the first half of 2009, up from £91 million from the equivalent period of 2008. The company benefited from the favourable effect of 2008’s high UK retail price inflation, which governs the charges that National Grid is allowed to earn from energy suppliers for using its networks. The company was also helped by the steep fall in interest rates, as about a third of its debt is at floating rates.

The world’s largest maker of household cleaners Reckitt Benckiser is close to a “multibillion pound cross-border transaction,” most likely candidate being industry giant Colgate. The news added 1.1 percent to Reckitt’s shares which closed at 3,140 pence.

Brewers SABMiller Plc who produces the Pilsner Urquell and Miller Genuine Draft beers among others saw their shares rise 3.4 percent to 1,714 pence on trading before the weekend. The rise was a result of their announcement of first-half profits that beat analysts’ estimates, as well their plans to launch a four year cost reduction program to save around £200 million annually by 2014.

U.K. pub owner Fuller Smith & Turner Plc, producers of London Pride ale, has announced first-half profits up 47 percent, as the company benefited from acquisitions and by selling more of its own beer brands. A spokesman for the company said that they expect the second half to be “significantly tougher,” as factors including good weather and the benefits of the purchases are unlikely to be repeated The company has added 11 pubs over the past year, seven in central London acquired from Punch Taverns Plc.

There was a lot of movement on the FTSE 100 before the index closed for the weekend. In the travel sector both Thomas Cook and Tui Travel sank at least 4 percent. Wolseley Plc and Taylor Wimpey Plc led a retreat among home builders after reports that unemployment will continue to force down property prices. Cable & Wireless Plc added 1.8 percent after positive market reports on the company’s performance.

The pound fell against the dollar, the euro and the yen on concern that the U.K.’s worst budget deficit since records began will hamper the nation’s recovery. The pound slid to its lowest level in more than two weeks against the U.S. currency. Britain’s £11.4 billion-pound budget deficit in October was the worst for the month since records began in 1993, according to data released on Friday by the Office for National Statistics.

• Pound/US dollar 1.6504
• Pound/Euro 1.1099
• Pound/Japanese Yen 146.7564
• Pound/Swiss Franc 1.6803

U.K. stocks declined for a fourth day with the benchmark FTSE 100 Index slipped 0.3 percent to 5,251.41, bringing this week’s loss to 0.9 percent. The gauge has rebounded 50 percent from this year’s low on March 3 amid signs government stimulus policies and record-low interest rates are leading the UK economy out of recession, albeit at a slow pace. The FTSE 250 dropped another 70 points to close on 9,167.60

Stateside the Dow Jones average had a quiet day on Friday; closing on 10318.16 The NASDAQ dropped just ten points on the day’s trading to close on 2146.04.

Gold maintained a grip near its all-time high while oil prices dipped and base metals eased as commodity markets paused for breath after their recent strong run.

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Tags: Alistair Darling, Bank, Bank of England, Banking, British Economy, British Pound, Cable & Wireless Plc, Confederation of British Industry, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Stability, FSA, FTSE, Fuller Smith & Turner Plc, General Lambert, Gold, London Pride ale, Miller Genuine Draft, Money, Money Markets, NASDAQ, National Grid, Pilsner Urquell, Punch Taverns Plc, Recession, Reckitt Benckiser, Richard Lambert, SABMiller Plc, Stock Markets, Stocks and shares, Taylor Wimpey Plc, Thomas Cook, Tui Travel, UK Banks, UK Economy, UK Financial Services Authority, UK government, UK Recession, Unemployment, Wolseley Plc

Mervyn King, governor of the Bank of England (BOE) has taken an about turn on his previous forecasts for economic growth in the UK in the coming two years, He tampers his newly found optimism with forecasts that any recovery in the UK economy will be both slow and unstable, largely because of the slow rate of industrial output which has been endemic since early 2008. King was quoted as saying that "Britain was facing a prolonged period of balance sheet adjustment” as households, businesses and government understandably rein in spending to levels they can afford. The BOE in its most recent quarterly inflation report has forecast growth rates of 2.1 per cent for 2010 and 4 per cent for 2011, making for a major upward revision from their own forecasts in August, of 1.9 per cent and 3 per cent for 2010 and 2011 respectively. The bank’s forecasts are also much higher than the outlook of private sector economists and even the UK Treasury’s predictions. Mervyn King.

Presenting the Bank’s latest quarterly inflation report, King predicted that the UK economy has "only just started" along its road to economic recovery, and lending by commercial banks would "probably remain weak over the next three years". The governor also predicted during his speech that inflation may "rise sharply over the next few months", triggered by VAT returning to 17.5% on 1 January 2010 as well as the effects of ever increasing fuel costs.

According to data from the Office for National Statistics, unemployment in the UK rose at its slowest rate for 18 months. Yet another signal that the UK economy may finally be on the verge of returning to growth in the fourth quarter of 2009. The level of employment in the UK is recorded through a complicated series of measures. Figures from the ILO (International Labour Organisation) showed that the number of people without a job, rose by 30,000 in the three months to September, bringing the total unemployed to 2.461 million, which was the smallest rise recorded since the second quarter of 2008. Unemployment levels in the UK now stand at 7.8%, which is 0.2% lower than most economic forecasts.

Lloyds Banking Group has announced that they plan increase the amount of fresh capital that they intend to raise by £1.5 billion, from £21 billion to £22.5 billion. The increase came in response to demands by the bank’s bondholders for a larger allocation of the contingent convertible instruments (CoCos). The news of the interested in CoCos was especially encouraging for the US Federal Reserve who is reportedly in talks with Wall Street executives over whether US financial groups should also use this method to raise capital. In the case of the Lloyds CoCos, they would be convertible if their equity strength falls from its current level of 8.6 per cent to below 5 per cent.

British Airways (BA) has announced that they are in advanced talks with and Spanish airline Iberia over some form of merger. Both companies are expected to hold separate board meetings at the earliest opportunity to discuss final details of the merger

In an official statement, representatives of BA hastened to point out that the meetings would consider the potential transaction, and that firm decisions had yet to been taken, and there were no guarantees that a deal would take place. Iberia has leaked that the deal under discussion would give it 45% and BA 55% of a new merged company. The firms have considered a tie-up for a number of years, and held talks on the issue in July 2008. BA chief executive Willie Walsh has previously said that a merger would help both firms in the current economic climate. Reports of the imminent merger sent British Airways shares higher, climbing 7.5 percent to 215 pence.

Share in telecoms operator BT Group, rose 3.7 per cent to 147 pence after they announced that they will be raising their full-year revenue outlook and dividend forecast for 2009. Thanks to a series of cost cutting measures including cutting back on 15,000 jobs, BT increased their second-quarter earnings to more than £900 million. The positive outlook for BT came as they announced along with their second quarter results that they are to raise their total cost-savings target for 2009/2010 from £1 billion to £1.5 billion.

The world’s largest owner of shopping malls Westfield Group have announced that retail sales in October at their UK centres in the U.K. have risen at the fastest pace in seven years, amounting to 3.7 percent in the three months. The company also reported that the number of stores closing in their centers has also fallen since steadily since the second quarter.

According to a recent statement, Westfield’s London shopping complex, which opened at the height of the global financial crisis last year, has attracted some 20 million visitors and has signed more than 15 new tenants.

Sterling continued to lose ground on Thursday trading falling against all the major currencies, with the notable exception of the Japanese yen.

• Pound/US dollar 1.6553
• Pound/Euro 1.1136
• Pound/Japanese Yen 150.0166
• Pound/Swiss Franc 1.6842

The FTSE 100 continues to gain strength, up 46 points to 5,276.55. The FTSE 250 also rose, up 175 points to 9,295.92.

In the US, fears continued to be voiced that, "the ‘real’ economy, as opposed to the financial one is still struggling to recover" and that if the government withdrew its stimulus spending measures, the economy could take some major steps backwards. The Dow Jones indexes erratic behaviour over the last few weeks as well as an already depressed job market seems to indicate the fact.

Meanwhile US Treasury secretary Tim Geithner, continue to voice his belief in the importance of a strong dollar, His statement came as the dollar dropped to its 15-month low. The continuing weakness of the World’s staple currency has led to some concern over the future of the dollar in its traditional role in the global economy. According to Geithner, the United States bears a special responsibility for trying to make sure that their global policies will sustain investors in the currency.

His words of comfort helped Wall Street very little, as the Dow Jones lost some of its earlier gains of this week, down 19 points to 10227.92. The NASDAQ made a minor increase, up six points 2157.17.

Warnings continue to come from the International Energy Agency (IEA) that the recent rises in oil prices "risks derailing the recovery" if they continue, whilst. Pointing out that demand for the "black gold" itself would slow down if price rises continue in 2010. The price of oil is now around $79 dollars a barrel, representing a rise of 77% so far this year. The IEA "in their monthly report, pointed their finger at China who they say are driving up demand, causing them to revised upwardly revise their forecasts. Overall the organisation predicts a 1.6% increase in demand for oil, up to 86.2 million barrels a day.

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Tags: BA, Bank, Bank of England, Banking, BOE, British airways, British Economy, BT Group, CoCos, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, FTSE, Iberia, IEA, International Energy Agency, International Labour Organisation, Lloyds, Lloyds Banking Group, Lloyds CoCos, Mervyn King, Money, Money Markets, NASDAQ, Office for National Statistics, Recession, Retail, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US Federal Reserve, US Treasury, Wall Street, Westfield Group, Willie Walsh

UK Prime Minister Gordon Brown was observed to be rapidly retreating from his proposal that a financial transactions tax be imposed to aid the global economy. Brown, made the speech on Saturday at a meeting of global finance ministers, suffered a backlash on his proposal to implement a miniscule “Tobin tax”. The Tobin tax originally saw the light of day in the early 1970s and was evolved by James Tobin, an influential American macroeconomist and recipient of the Nobel Prize for economics, of that time who proposed imposing a small tax on every amount exchanged from one currency into another. The US was among the first to criticise Mr. Brown who up till now has defended the financial sector against more aggressive moves on regulation by other European governments in the past.

A recent report has suggested that in the past six months alone, only one in ten UK savers have enjoyed an increase on the interest rates paid on their accounts despite the Bank of England’s base rate remaining static…

The study shows that 10% of variable savings accounts are paying lower rates than they were in May, with just 3.5% of variable rate accounts have seen interest rates increase over the same period, despite the implied competition for savers’ deposits.

According to the report, almost half of variable rate accounts are being paid less than 0.5%, while almost a quarter of the banks are offering returns below 0.1%.

The pound continued its recovery against the dollar over the weekend, rising also against all the major currencies.

• Pound/US dollar 1.6835
• Pound/Euro 1.232
• Pound/Japanese Yen 151.2029
• Pound/Swiss Franc 1.6947

As Monday’s bidding deadline drew closer, shares in Cadbury eased by 0.5 percent to 758 pence. Market analysts expect US food company Kraft to make a formal offer on Monday under the current terms whilst leaving room for maneuver at a later stage. Kraft Foods offer is projected to be around £10 billion ($16.59 billion), and will setting the battle for control of the famed British confectionary company officially in motion.

Those apparently in the know have stated that Kraft had always planned to take its offer directly to Cadbury shareholders, This they will do on Monday, in response to the U.K. Takeover Panel’s deadline to either make a formal offer or back off for six months.

On early rumours that the debt-laden rail and coach operator National Express could launch a fully underwritten £250 million placing and open offer as early as next week, their shares added 4.3 per cent to 330 pence on early trading.

Meanwhile it was reported that Vodafone are preparing a fresh round of cost cutting in an attempt to offset falling revenue at the mobile phone operator.

Vodafone intend to reduce their operating expenses by £1 billion gradually by March 2011, however market analysts now say that the target might even be increased to £1.5 billion. Expectations are that Vodafone will report turnover of £21.6 billion for the six months to September 30, meaning an increase of 8.3 per cent on the same period in 2008, with profits of £7.5 billion, up 2.8 per cent.

Rising unemployment and economic uncertainty in the UK has helped one company report revenues to increase revenues by 15.6 per cent in the six months to September 30. BrightHouse, who rents high-end consumer durables to people who have a low or non-existent credit rating, enjoyed profit growth up £94.6 million for the period. The privately owned retail chain, who supply top-of-the-range television sets, electrical appliance and furniture on a kind of rent/buy agreement without requiring large deposits. Turnover was increased thanks to the opening of 11 new stores in the period, bringing the nationwide total to 188, although like-for-like revenue also rose by close to ten per cent. BrightHouse’s earnings were up 23.7 per cent from the same six-month period in 2008.

Battery-operated robotic hamsters costing about £6 each look like becoming the Christmas hit for 2009, with demand in the UK for outgunning supply. GoGo Pets are the hottest toy of the season, seemingly on a par with demand for the famous Teenage Mutant Ninja Turtles, the smash hit of Christmas 1987. The interactive hamsters, Squiggles, Patches, Chunk, Pipsqueak and NumNums, respond to touch with squeaks and noises, and can be set to run about randomly in “explore” mode, and to “coo and chirp” calmly when held. Initial demand for the toys has proven so strong that retail giant Toys R Us had removed them from their Christmas toy catalogue to avoid disappointing customers.

On Friday, the FTSE 100 closed 17.1 points higher at 5,142.7 after a volatile session in which the market rose on early trading and then fell sharply after the release of a key US unemployment report, later recovering as the data was reassessed.

The FTSE 100 rose by 98 points, or 2 per cent for the week, its best weekly performance for a month. Meanwhile, the FTSE 250 rose 62.3 points to 9.082.7, leaving the mid-cap index up 170 points, or 2.2 per cent.

Irish airline Aer Lingus has announced a drop in sales of 9.7% in the third quarter, largely due to a drop in long-haul passenger traffic.

In the three months to September, long-haul numbers dropped 13%, offset by increase of 10%, passenger traffic in short-haul flights

Despite the reduction in turnover, share values s surged 11% to 62 Eurocents as investors recognized some clear signs that the loss-making airline was beginning to stabilise. Last month, the carrier said it would cut almost 800 jobs to try to save 97 million Euros a year (£90 million) by 2011.

The dollar jumped and Wall Street stocks look set to open lower after a crucial report on the US labour market showed unemployment at a fresh 26-year high. The unemployment rate rose from 9.8 per cent in September to 10.2 per cent last month, as the Labor Department announced that non-farm payrolls in October fell by 190,000, the highest since April 1983.

Despite the negative figures, the Dow Jones held its own, up 17.46 points to 10023.42. The NASDAQ also climbed a little, reaching 2112.44.

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Tags: Aer Lingus, Bank of England, BrightHouse, British Economy, British Pound, Cadbury, Chunk, Currency, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, GoGo Pets, Gordon Brown, hamsters, Kraft, Money, Money Markets, NASDAQ, NumNums, Patches, Pipsqueak, Recession, robotic hamsters, Squiggles, Stock Markets, Stocks and shares, Tobin tax, Toys R Us, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Vodafone, Wall Street

Chancellor of the Exchequer Alistair Darling now appears likely to give Lloyds the go ahead to test the seriousness of its ambitious £25 billion refinancing plan. Darling’s tacit agreement will be looked upon by city watchers as a definite indication that the chancellor could be prepared to release the bank from its obligations to the government’s toxic asset insurance scheme. It would appear that Darling has concluded that Lloyds’ plan to bring in more private capital is in the public interest. However it would appear that his final decision will only be positive when he is convinced that the market is ready for such a bold initiative. Darling is expected to announce his decision to the Lloyds at the early part of next week. The move will mean that the bank can then begin to appoint underwriters and test the market. Only then will Darling make the final decision and may even withdraw approval for the plan if he concludes the move carries to many risks for the already under siege UK taxpayer.

As expected, the European Union (EU) has approved plans for nationalized bank Northern Rock to be split into two parts, a move that is expected to pave the way for a partial sale of the bank.

One half of the bank, known as the "good" bank, would trade as retail bank holding deposits including some of the Rock’s existing mortgages, as well as lending money to consumers only.

The toxic side of the bank will remain in government hands, whose unenviable task it would be to attempt to salvage as much as the taxpayer’s money tied up there. The chancellor has ruled out the possibility of completing the sale of Northern Rock before the general election, in spite of winning approval from Brussels.

Meanwhile Spanish banking giants Santander continue to clean up on the UK high street. The bank announced that profits during the first nine months of the year for its UK banks have risen by more than a third.

Abbey, Alliance & Leicester and Bradford & Bingley banks, owned by Santander announced a £1.2 billion profit, up 38% from the same period in 2008.

Debt laden bus and rail operator National Express has wound up their discussions with rival Stagecoach regarding a possible merger. Instead they will press ahead with their plans to mount a rights issue to re-finance the company. Yesterday’s announcement follows weeks of speculation over a possible tie-up between the groups that would have created a transport giant with an estimated worth of £1.7 billion.

Oil and gas supply group BG, announced on Wednesday that their post-tax profits for the third quarter had fallen 39 per cent to £474 million from last year’s £777 million. A spokesman for the company said that the fall in gas and oil prices had been partially offset by advance sales of liquefied natural gas at advantageous prices. Although natural gas has rallied since early September, it had not done as well as crude oil during continued signs of economic recovery.

Sterling continued to rise in value yesterday against the dollar, while rising slightly against the Euro.

• Pound/US dollar 1.6393
• Pound/Euro 1.1131
• Pound/Japanese Yen 148.0908
• Pound/Swiss Franc 1.6804

London’s FTSE 100 dropped 2.32% or 120.55 points to close on 5080.42. The FTSE 250 plummeted a further 3.19% percent yesterday, down 291.78 points to close on 8849.50

For the first time in half a year, sales of new homes in the US fell as buyers opted for bargains on existing and foreclosed houses. Unexpectedly new home sales fell by 3.6 per cent from August to September, defying economists’ expectations that they would increase. Compared with a year ago, sales of new homes were down by 7.8 per cent, according to commerce department figures

On Wall Street, the Dow Jones Industrial Average closed down 1.21% after news that the annual rate of US new home sales had fallen unexpectedly in September.

At close of trading Wednesday it had fallen 119.48 points to 9762.69. The NASDAQ Composite index also took a tumble down 56.48 points to 2059.61.

It was announced on Wednesday that new orders for durable goods rebounded in September after slumping the prior month, offering another sign that manufacturing activity is stirring in the US

European shares also fell fairly sharply yesterday, largely due to disappointing company results and negative US economic data.

Norway has become the first European country to raise its interest rates since the beginning of the global financial crisis. The country’s central bank raised the cost of borrowing from 1.25% to 1.5% in a move that was widely expected. A spokesman for the bank stated that the increase was necessary due to increases in inflation and recent unemployment figures that were considerably lower than previously projected.

Oil prices dropped by more than $2 a barrel on Wednesday, as the latest US weekly inventories data continued to show supply outstripping demand. All in all the expected recovery in the dollar weighed on investor sentiment towards the commodities market.

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Tags: Abbey, Alastair Darling, Alliance & Leicester, Bank, Banking, BG, Bradford & Bingley, British Economy, British Pound, Chancellor of the Exchequer, Currency, Current Account, Darling, Dow Jones, Economy, Employment, Financial News, FTSE, gas, llo, Lloyds, Lloyds Banking Group, Money, Money Markets, Mortgage, NASDAQ, National Express, Northern Rock, Oil, Recession, Retail, Santander, Savings, Stagecoach, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, Unemployment, Wall Street

For the third consecutive month of increase, UK housing prices have increased. They are reported to have risen by as much as 1.6% in September. Housing prices in the UK continue to remain considerably lower than in September 2008, as much as 7.4 percent. However since the end of 2008, prices have grown by 1.7 percent as increased demand and reduced inventory have combined to push housing prices up, especially in the recent months. House prices increased by 2.8% in the third quarter of 2009, making for the first rise since the third quarter of 2007, and the largest percentage growth since the first quarter of the same year. The increased demand for property is believed to stems from improved affordability, and the reduction in both interest rates.

It may come to pass that the U.K.’s largest government-controlled bank, the Royal Bank of Scotland Group Plc (RBS) may have to surrender more than ten percent of their one million small business customers, The reason being that the European Commission has imposed a penalty on the RBS for receiving billions of pounds of state aid. Currently it is reported that the RBS, in a move designed to reduce their credit card risk portfolio are only issuing new cards to existing clients.

The Office for National Statistics has announced that U.K. manufacturing output has slumped 1.9% from the month in August whilst dropping 11.3% on a yearly basis. The wider industrial production measure fell 2.5% from July and slid 11.2% from August 2008.

The FTSE 100 rose by 2.26 percent on yesterday’s trading, or 113.65 points to close on 5137.98. The FTSE 250 was still on the rise, but at a reduced pace, closing up a further 25.12 points to close for the day on 9,226.35.

The pound made a minor recovery against the leading currencies, while continuing to hover around $1.60. The Sterling’s latest bout of weakness surrounding Sterling began after UK industrial production was shown to have slumped in August. Additional statistics released on Wednesday show that corporate profitability in the UK had deteriorated for a fifth successive quarter and is standing at its lowest level since 2001.

• Pound/US dollar 1.5958
• Pound/Euro 1.10863
• Pound/Japanese Yen 141.422
• Pound/Swiss Franc 1.64861

Europe’s largest discount airline, Ryanair Holdings Plc set aside as being of “no substance” recent reports claiming that the company is preparing to take control of Aer Lingus Group Plc through a rights issue. In another sign of the advantage that short-haul, low-cost carriers such as EasyJet hold over long-haul flag carriers during the current downturn, the company announced that it had handled more than 4.4 million passengers in September, an increase of 5.3 per cent over the corresponding month in 2008. The increase, the largest since April, was well above the 4.7 per cent rise the airline recorded in August, traditionally one of its busiest months. In any event, stock in EasyJet fell 0.3 percent, to 3.38 Euros.

According to Sir Terry Leahy, chief executive of Tesco, the worst is over for the UK economy as well as for the U.K.’s premier food retailer. Sir Terry’s revelation came after Tesco’s announced pre-tax profit for the first half of its financial year rose that had risen by 1 per cent to £1.42 billion. Sir Terry prediction is that that the UK would see a “slow and steady recovery” as the money pumped into the economy to stimulate it had to be paid back. He added that uncertainties over the financial outlook for 2010, such as public sector cuts, the proposed increase in value added tax and the threat of rising unemployment, would not be sufficient to prevent “a gradual recovery. Sir Terry also defended Tesco’s performance in the US, where its Fresh & Easy chain has reported losses of £85 million in the six months to the end of August. Shares in Tesco rose 0.4 percent, to 391.4 pence.

The management team at Matalan have reportedly held several meetings over the past few weeks to examine strategic options for the discount clothing and home-ware retailer. Subjects on the agenda included the possible sale of the company during 2010 with an asking price of around £1.5 billion pounds. If a sale was to go through, and discussions are at a very early stage, company founder John Hargreaves would be liable to realise hundreds of millions of pounds in profits from the sale. Matalan have invested significant sums of money in revamping their 200 UK stores have reported solid profits for June.

Shares in Vodafone, the World’s largest mobile phone service providers were under pressure for a second day, dropping 2 per cent to 137 pence. The share price fall could be attributed to a culmination of factors, among them, fears of a price war in India, and analyst’s predictions that AT&T was considering opening their mobile network to third-party voice applications such as Skype. A move that would put pressure on Vodafone’s Verizon Wireless division to emulate.

In the year to 30 September, the US budget deficit more than tripled to a record £877 billion ($1.4 trillion) according to US Congress estimate figures recently released. Analysts had previously predicted a slightly higher deficit but later revised their estimate, which has been attributed to increased government spending coupled with a huge drop in tax revenues. The actual deficit will be released by the Treasury Department later this month.

The Dow Jones index dropped a little on yesterday’s trading, closing on 9725.58, down 5.67 points. The NASDAQ index continued to rise, but at a slower pace, up just 6.76 points to close on 2,110.33.

The White House have announced that it was weighing policy options designed to create new jobs to ease the burden on America’s unemployed, currently numbering more than 15 million. A spokesman for the President hasted to rule out speculation that a second stimulus to provide a further boost to the US economy was on the cards. The majority of US economists believe that the country was on track to move out of recession. However the black cloud of increasing unemployment is hanging over the picture, with unemployment figures hitting 9.8 per cent, the highest rate since 1982.

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Tags: Aer Lingus Group Plc, AT&T, Banking, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, EasyJet, Economy, Employment, European Commission, Financial News, Fresh & Easy, FTSE, Global Credit Crisis, House Prices, Matalan, Money, NASDAQ, Office for National Statistics, property, RBS, Recession, Royal Bank of Scotland Group Plc, Ryanair Holdings Plc, Sir Terry Leahy, Skype, Stock Markets, Stocks and shares, Tesco, The White House, Treasury Department, UK Banks, UK Economy, UK government, UK industrial production, UK Recession, Unemployment, US budget, US Congress, US economy, Verizon Wireless, Vodafone

Chancellor Alistair Darling has recommended a pay freeze for 40,000 senior public servants in 2010/11. Darling has written to salary review bodies calling on them to freeze the pay of top level civil servants, such as judges, senior NHS managers as well as General Practitioners. It is expected that public spending priorities and cuts will be announced in this autumn’s pre-Budget report, as the chancellor revealed he would soon be calling ministers into the Treasury for “very robust” discussions.

If the Financial Services Authority (FSA) get their way UK banks and investment firms would have to increase their holdings of cash and government bonds by £110 billion as well as reducing their reliance on short-term funding by as much as 20 per cent in the first year. This series of tough liquidity standards put forward by the FSA on Monday shows a radical firming up of liquidity requirements than in previous years. In total banks and investment firms could be required to increase their holdings of easily redeemable assets by a total of £370 billion as well as reducing their reliance on short-term funding by 80 per cent from current levels

Chief executive of the HSBC bank, Michael Geoghegan, is less convinced than many others that the global financial recovery is well under way. He has in fact taken the standpoint that a second downturn is bound to happen in the coming months. In preparation, Geoghegan plans to freeze any expansion plans for the bank till the situation becomes clearer. Speaking after HSBC announced a shake-up of its governance 10 days ago, Mr. Geoghegan is now responsible for strategic issues that previously lay with the bank’s chairman, Stephen Green.

Taking a more conservative stance on salaries are the Lloyds Banking Group, who are reportedly in the early stages of reviewing pay packages for its top executives. Lloyds, who got themselves into hot water when they rescued struggling lender HBOS last year, pledged to review remuneration after the government backed takeover. The bank did issue a statement over the weekend that no decisions had yet been made on salaries and the bank was more focused on a number of other and more pressing issues, particularly whether they will enter the government’s asset protection scheme.

According to market analysts, many British retailers are facing a worse Christmas than last year, when 15 major chains failed, rising unemployment and fragile consumer confidence would result in many companies, many of them struggling to survive until the holiday season entering formal insolvency proceedings within a year. Market information shows that 125 retail companies encountered critical trading and cash problems in September, up 37 percent from August. Outdoor goods retailer Blacks Leisure showed how difficult it is to survive in the UK high street, by announcing plans to shut down 89 of their loss making stores as well as cutting jobs as part of an emergency recovery plan.

Bucking the retail trend is the department store chain TJ Hughes, who has based their success in specialising in discounted branded goods. The company has reported a 30 percent increase in underlying profits in the year to the end of January. Hughes, who operates in 50 locations across England, Scotland and Wales, announced pre-tax earnings that rose to £9.2 million. Since June 2008, TJ Hughes has undergone aggressive expansion and a 51st store is expected to open soon

The FTSE 100 limped back over the 5,000 points mark, rising 35.63 points to close on 5024.33. The FTSE 250 made its usual early in the week recovery rising 82.57 points to close on 8982.53.

The pound continued to find it difficult to rise above the $1.60 mark, while falling behind against the remaining principal currencies.

• Pound/US dollar 1.597
• Pound/Euro 1.10863
• Pound/Japanese Yen 142.4066
• Pound/Swiss Franc 1.6421

A recent survey has shown the US services industry rising in September for the first time in a year. The services sector accounts for 80% of the US economy. Simultaneously, separate data released showed that the US jobs market also strengthened last month for the first time since January 2008. The data boosted US markets with the Dow Jones index and NASDAQ both rising

The Dow Jones index rose by 112.08 points at 9,599.75. The NASDAQ index rose by 20.04 points to finish the day’s trading on 2,068.15.

Hundreds of farmers have protested to European Union (EU) agriculture ministers at a meeting held in Brussels to discuss low milk prices. The urgently convened meeting came as a result weeks of protests across Europe, with farmers dumping milk stocks and withholding supplies at what they see as being sold at uneconomic prices. To the farmer’s considerable chagrin, the only decision reached at the meeting was to create a panel of experts to examine at the dairy sector. Recently prices of milk and dairy products have fallen sharply in Europe as supply exceeds demand.

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Tags: Alistair Darling, Banking, Blacks Leisure, British Economy, British Pound, British retailers, Credit Crunch, Currency, Dow Jones, Economy, European Union, farmers, Financial News, Financial Services Authority, FSA, FTSE, HBos, HSBC, Lloyds Banking Group, Michael Geoghegan, Money, Money Markets, NASDAQ, NHS, pre-Budget report, Recession, Stock Markets, Stocks and shares, TJ Hughes, UK Banks, UK Economy, UK government, UK Recession, Unemployment, US economy