Darling blames the financial sector for the UK’s delayed return to growth.

Chancellor of the Exchequer Alistair Darling has said in a recent interview that the U.K.’s economic recovery is being retarded by the country’s large financial services sector. “I am not surprised that it has taken time for the economy to return to growth,” Darling was quoted as saying. “What is holding us back is the fact that we have a large financial-services sector, which has affected what we produce.”

British Sky Broadcasting Group Plc,(BSB) the U.K.’s biggest pay-television provider, has announced a 3.4 percent increase in first-half operating profit as increased pay-TV and broadband subscribers boosted sales. Earnings for BSB in the six months to Dec. 31 2009 were £401 million ($651 million) up from £388 million in 2008. Turnover rose 10 percent to £2.87 billion for 2009.

Soft drinks and squashes producer Britvic have reported strong first-quarter sales growth, whilst striking a more cautious note about second-quarter trading, partly because of the extremely cold weather conditions experienced across Europe in December and January. Britvic, whose brands include Tango and Robinsons, reported sales of £242.7 million for the 12 weeks to December 20, an increase of 11 per cent on the same period in 2008.

Richard Branson’s financial-services un Virgin Money Holdings U.K. Ltd., it, named former Lloyds TSB Chief Executive Officer Brian Pitman as chairman as it seeks to build a new retail banking group. Financial analysts have credited Pitman with transforming Lloyds TSB into Britain’s most profitable lender before his departure in 2001.

No sooner had the press conference to announce the launch of the new Apple iPad than mobile phone operators in the UK were preparing to open talks with the company regarding the provision of third generation (3G) internet services to the new device when it hits the UK shores. Industry sources said that O2, 3, Vodafone, Orange and T-Mobile are preparing to meet Apple "in the next week" Apple is expected to ship the Wi-Fi only versions of the iPod to the UK in March, while the 3G versions will go on sale in the US "and selected countries" in April. Apple chief executive Steve Jobs announced during the launch on Wednesday that the priority was to secure agreements with international operators for 3G, with deals expected by the end of July.

On the money markets, the euro dropped to a five-month low against the pound on Thursday as concerns mounted over the finances of Greece and other Eurozone countries. The pound closed at 1.6129 against the dollar, with the Euro being traded at 1.1541

UK banks fell sharply at the end of trading, retreating from earlier gains. Lloyds Banking Group fell 0.2 per cent at 51.83 pence, HSBC dropped 0.5 at 660 pence, Royal Bank of Scotland lost 1.3 per cent to 33.29 pence and Standard Chartered was down 2.6 per cent at 1432 pence.

The FTSE 100 fell 71.7 points, or 1.4 per cent, to 5,145.74, with Wall Street’s weak start also being a factor.

The year 2009 gas witnessed the biggest decline in air passenger traffic in the post-war era, according to figures released by the International Air Transport Association (IATA).

"In terms of demand, 2009 goes into the history books as the worst year the industry has ever seen," according to a spokesman for the organisation. Passenger traffic dropped by 3.5% from a year earlier, while freight traffic fell 10.1% as the downturn hit demand. However, figures for December showed a rise in traffic of 1.6% on a year ago.

Chairman of the US Congress financial services committee, Barney Frank, has argued that the dramatic proposals unveiled by the administration last week to clamp down on banks could be incorporated into legislation could be enacted into law within months.

On Frank’s prediction, the Dow Jones fell by 135 points, to close on Thursday at 10120.46, while the NASDAQ lost 31 points, to finish on 2179.0.

The US Commerce Department have confirmed that December sales of new homes have fallen, and for the second month in a row.

Sales fell by 7.6% to 342,000 homes, down from a revised rate of 370,000 in November. Analysts had expected new home sales to increase in December.

The number of new homes sold in 2009 was 374,000, 23% fewer than in 2008 and the lowest number sold in a year on record.

The Federal Reserve left interest rates unchanged at their range of between zero and 0.25%, as the US central bank repeated its vow to keep rates exceptionally low for an extended period. Interest rates have remained at their current low range since December 2008.

Ford has posted an annual profit for the first time in four years.

The carmaker made a $2.7 billion (£1.7 billion) profit in 2009, a dramatic improvement on their loss of almost $15 billion in 2008. A spokesman said that Ford expects to remain in profit for 2010.

The company made an $868 million profit for the third quarter of 2009, a dramatic improvement on the $6 billion loss it made for the same period the previous year. Ford attributed their return to profitability to cutting costs and reducing debt levels.

Thanks largely to "exceptional demand" for Windows 7, computer software giant Microsoft has reported a 60% jump in profit for the three months to 31 December 2009. Net profit for the quarter was $6.66 billion (£4.13 billion), up from the $4.18 billion for the same period a year earlier. Microsoft also reported turnover for the quarter of $19.2 billion, comfortably beating analysts’ forecasts.

French President Nicolas Sarkozy has called for a fundamental rethink of capitalism in the aftermath of the financial crisis.

His comments came as bankers and regulators clashed over proposals to break up banks that threaten the whole financial system.

Mr Sarkozy said he wished to restore a "moral dimension" to free trade.

France has supported forcing banks to hold more capital and curbing bonus payments in global negotiations over the past year on how to reform the system to prevent future crises.

Samsung Electronics have overtaken Hewlett-Packard (HP) to become the world’s largest technology company in terms of company turnover. Samsung have reported full-year sales of $117.8 billion which overtook HP’s sales of $114.6 billion in 2009. With a sales forecast at $127 billion, Samsung are expected to surpass its US rival again this year, with HP expected to achieve "only" $120 billion in sales.

In energy markets, crude oil prices consolidated ahead of the latest US weekly inventories data, with prices averaging around $74 a barrel. US crude stocks were expected to have risen 1.4 million barrels last week, according to a recent poll of analysts, with demand from US refineries remaining weak.

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City Minister Lord Myners said he recognized the need for state-backed banks to compete in the global market, as he signaled the government would not block them from paying large bonuses to staff. Lord Myners told the Scottish affairs committee on Wednesday it was important the Royal Bank of Scotland was able to recruit and motivate employees. His comments came a day after the bank’s chief executive Stephen Hester revealed recruitment posted its biggest problem as RBS was being forced to compete on bonuses.

The number of businesses that went bust in 2009 increased by 18 per cent, but the economic outlook is slightly brighter for 2010. Recent information shows hat from the middle of 2009 onwards, the rate of business failures started to slow down compared to 2008 and early 2009, with a 7.7 per cent year-on-year decrease. This has to be good news for the economy as a whole. Business failures last year were not as extreme as 2008. The number of firms going bust in the fourth quarter of 2009 increased by almost a quarter compared to 2007, still an improvement on 2008, where the year-on-year increase was almost a third.

U.K. manufacturing unexpectedly stalled for a second month in November, a sign the economy is struggling to shake off the longest recession on record.

Factory output stayed unchanged from October, the Office for National Statistics said today in London. Economists predicted an increase of 0.2 percent, according to the median of 25 forecasts in a recent survey.

Bank of England policy makers last week pledged to spend the rest of their £200-billion bond-purchase program as they tried to cement an economic recovery.

Home Retail Group Plc sank 6.2 percent to 265.8 pence, the biggest decline since September, after a company spokesman announced that growth in the industry will be “hard to come by.”

Meanwhile HMV Group Plc slid 8 percent to 84.4 pence, the sharpest drop since December 2008, after saying holiday sales at stores open at least a year were hurt by the performance of its Waterstone’s bookstore chain.

The pound has been little changed against the dollar on recent days, and traded at 1.6245, up 0.5 percent on the day. The Euro was up to 1.262

The FTSE 100 Index added 24.72, or 0.5 percent, to 5,498.20. The FTSE 100 has extended its surge since March last year to 57 percent after central banks cut interest rates to record lows and governments worldwide committed about $12 trillion to revive the economy

Stateside President Barack Obama has ordered Wall Street banks to repay $117 billion (£72 billion) to taxpayers after criticizing banks for their "massive profits and obscene bonuses" culture. The tax is to recoup money US taxpayers are expected to lose from bailing out the banks during the financial crisis. The move follows populist anger at banks, seen as being responsible for causing the recent economic crisis. President Barack Obama will announce a sweeping new levy on about 50 financial institutions that will raise an estimated $90 billion to reduce the federal debt.

US stocks struggled to push higher on Thursday after an unexpected drop in retail sales gave investors reason for caution.

The Dow Jones Industrial Average had gained 0.1 per cent to 10,690.90 and the NASDAQ Composite was also 0.1 per cent higher at 2,310.58.

The market had opened lower after the latest commerce department figures showed retail sales, excluding cars, had fallen 0.2 per cent in December, with analysts forecasting a 0.3 percent increase

According to figures from the US Commerce Department, sales at US retailers saw an unexpected fall in December, casting uncertainty over the recovery of the US economy. Retail sales fell by 0.3% compared with November. Concerns over job security are expected to continue to restrict spending, with unemployment still at 10%. December’s figures end a tough year for US retailers, with total sales for 2009 down 6.2% on the previous year.

On the other hand, the tech industry’s earnings season got off to a flying start on Thursday with Intel reporting demand for its microprocessors boosted fourth-quarter revenues to $10.6 billion, well ahead of analysts’ forecasts of $10.2 billion. The world’s largest chip maker also reported earnings per share a third higher than Wall Street expected, at 40 cents rather than 30 cents.

Compared with a year ago, when orders collapsed in the teeth of the recession, Intel’s profits were 875 per cent higher at $2.3 billion.

Oil prices traded below $80 a barrel on Thursday, consolidating after recent losses triggered by a sharp increase in US crude and oil products inventories The recession has put a dent in future North Sea oil and gas production, with companies tapping fewer new oil reserves in 2009 than in previous years of operations there. Only eight oil and gas fields – expected to produce a combined total of 140 million barrels over their lifetime – began production in 2009, according to industry consultants.

That compares with an average of 600 million barrels of new reserves brought on stream each year between 2004 and 2008.

Production at the North Sea’s old fields has been declining since the start of the last decade increasing UK dependence on foreign oil.

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Tags: Bank of England, Banking, Barack Obama, British Economy, British Pound, Currency, Dow Jones, economic recovery, Economy, Financial News, FTSE, HMV Group Plc, Home Retail Group Plc, Intel, Lord Myners, Money, NASDAQ, North Sea oil, Office for National Statistics, Oil prices, RBS, Recession, Retail, Royal Bank of Scotland, Scottish affairs committee, Stephen Hester, Stock Markets, Stocks and shares, UK Banks, UK Economy, UK government, UK Recession, US Commerce Department, Wall Street, Waterstone's

In the Queen’s speech to be made today, Gordon Brown is expected to emphasize the need for fiscal discipline as the UK seeks to extricate itself from the current financial downturn, and catch up with the rest of the major global economies who have already done so. At the heart of his message will be a very strong hint to ministers to accept budget cuts. What he will be implying is that it is important for the Labour party to show unity and credibility on public spending ahead of the forthcoming election battle with the Tories. The prime minister’s package will feature a fiscal responsibility bill, that will confine to law Brown’s programme significantly reduce Britain’s £175 billion deficit by 2014 and cast it into history by 2018.

Meanwhile the people who are generally regarded as being responsible for the UKs financial quandary, the bankers, are beginning to bleat a little at the prospect of having their bonuses cut by the Financial Services Authority (FSA) This time the banker’s plight is being supported by no less than a former banker, Sir George Mathewson who acted as chairman of Royal Bank of Scotland. Sir George complained that any moves to cancel any pay deals which appear to reward undue risk-taking would interfere with the rule of law.

But Sir George said he feared

According to the Office of National Statistics, UK inflation has jumped to an annual figure of 1.5%, largely driven up by a sharp annual rise in the cost of petrol and a huge jump in the prices of second-hand cars. Economists were not taken by surprise by the increase in the consumer prices index (CPI, which they expected to rise by between 1.4% and 1.5% for October. The incredible 14% rise in second-hand car prices was one of the driving forces behind the inflation rise.

ITV have confirmed that Archie Norman, the former chief executive of supermarket group Asda, will be taking over the role of chairman in their company. Former Tory MP Norman’s appointment brings to an end a seven-month search to find a replacement for outgoing chairman Michael Grade,

Archie Norman comes to the ITV with an impressive track record, having being credited with the turnaround of Asda in the 1990s. He will face no less of a daunting challenge at ITV, where increased competition and difficult trading conditions has caused a major downturn in advertising revenue.

Chocolate makers Hershey and Ferrero are said to considering a joint bid for Cadbury that could be welcomed by the UK confectionery manufacturer as they fight to fend off the hostile takeover by Kraft Foods. Discussions between the two sides have been reported to be at the “very preliminary" stage. Apparently Hershey executives have been more aggressive about pursuing a deal; however no offer has been made. The talks are the strongest sign that a possible rival bid to Kraft’s $16.7 billion offer is in the offing. Kraft’s initial bid was rejected by Cadbury as being “derisory”.

Sterling increased against the major currencies on trading since the weekend

• Pound/US dollar 1.6793
• Pound/Euro 1.1283
• Pound/Japanese Yen 149.9328
• Pound/Swiss Franc 1.706

World stocks continue to gain ground as optimism regarding the global economic recovery continuing. UK shares have again reached and broken their 14-month high.

In the UK, the FTSE share values improved as commodities and especially gold touched a new record on the general positive mood.

The UK’s benchmark FTSE 100 index closed up 1.6%, or 86.29, to 5,345.93. The FTSE 250 also rose, up 28 points to 9,401.15.

US Commerce Department figures have shown that retail sales rose by more than expected in October, largely due to the resurgent car market, Sales rose by 1.4%, offsetting September’s 1.5% fall was revised with both months’ figures were dominated by the impact of car sales.

If car sales are taken out of the equation, retail sales rose by just 0.2% in October.

Federal Reserve chairman Ben Bernanke has revealed that the US central bank was monitoring currency markets "closely" and will conduct policy in a way that will "help ensure that the dollar is strong". In one of his rare public comments on the state of the dollar, Bernanke predicted that currency’s recovery would begin to gain momentum despite "headwinds" from credit and unemployment, while inflation was likely to remain "subdued". However the dollar, after a brief upturn, continued to retreat against other major currencies. Bernanke also added that the Fed still expected to keep rates near zero for an "extended period", hastening to add that his statement was, not a commitment.

In the US, all the trading indexes were seen to be advancing at lightning pace.

The Dow Jones industrial average gained 1.3%

Or 52.30 points to 10437.42. The NASDAQ continues to move forward, up 43 points 2203.78

US car giant GM recovery continues. This week the company announced that they will begin returning their US government loans earlier than expected.

The first payment of $1.2 billion will be made in December, and the company predicts that the loans could fully repaid 2011, four years earlier than expected. The news comes as GM reported a third quarter net loss of $1.2 billion. GM currently has debts of $6.7 billion to the US government, $1.4 billion to the Canadian government and 400 million Euros to the German government, which the company received in support of GM’s European subsidiary Opel.

US billionaire Warren Buffett’s investment firm have increased their stakes in the Nestle and Exxon Mobil companies. .

The news has created a strong buzz among investors as stock picks by Buffett always create interest, as the 70 year old super entrepreneur is considered to be one of the world’s shrewdest investors.

Recent figures released by the Japanese government have shown that the country’s economy has grown for a second successive quarter.

The world’s second largest economy grew by 1.2% in the third quarter, much faster than economists had predicted. Analysts have hastened to predict that say overall growth is likely to remain sluggish for the foreseeable future.

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Tags: Archie Norman, ASDA, bankers, Banking, Ben Bernanke, British Economy, British Pound, budget cuts, Cadbury, Currency, Dow Jones, economic recovery, Economy, Employment, Exxon Mobil, Federal Reserve, Ferrero, financial downturn, Financial News, Financial Services Authority, FSA, FTSE, GM, Gordon Brown, Hershey, Interest Rates, ITV, Kraft Foods, Labour party, Michael Grade, Money, Money Markets, NASDAQ, Office of National Statistics, Opel, Recession, Retail, Royal Bank of Scotland, Sir George Mathewson, Stock Markets, Stocks and shares, The Queen’s speech, UK Banks, UK Economy, UK government, UK inflation, UK Recession, US Commerce Department, Wall Street, Warren Buffett