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

The Office of Fair Trading (OFT) get their way , in the very near future company directors who turn a blind eye to price fixing at their companies are liable to be banned for up to 15 years. According to a statement published by the OFT, Britain’s antitrust regulator are preparing considerably tougher penalties not only for directors who were directly involved in price fixing but also those who were guilty by default. The current rules ban only directors who themselves breach competition law through offences such as price-fixing.

In common with other U.K. regulatory bodies the OFT, intend to raise the penalties for those individuals who are found guilty of price fixing, including jail sentences. To show that these are not empty threats, the OFT has recently charged four former and current executives of British Airways Plc with fixing the price of fuel surcharges on transatlantic flights with one of their competitors. If found guilty, the four could go to prison for as long as five years.

Anyone saying that the UK economy is dying obviously hasn’t been talking to their funeral undertakers recently. As is often the case, the funeral industry is experiencing record upturn in trade that has been going on for the last year at least. Not that more people are dying, just that many are concerned that when the time comes when they will be called to leave this Earth, their loved ones wall be unable to meet the bill. For this reason, more and more UK subjects are joining a plan organized by Britain’s largest provider of funeral plans to pay for their funeral in advance through easy payments.

The company, Co-operative Funeral care, who operate 1,100 funeral homes across the O.K., announced this week that they experienced a 28% increase in the number of funeral plan sales during the last six months alone.

A spokesman for Co-operative Funeral care pointed out that subscribing to a funeral plan represented a sound investment for people as they are guaranteed against future increases in costs.

Funeral plans, however do not cover all the costs with the "future clients" having to pay for their burial plot.

Northern Rock, the UK building society come bank, who recently reported first-half losses of £725 million, has announced that they will be deferring payments on some of its subordinated debt to help conserve capital. The UK bank, largely public owned, where permissible. Granite, the bank’s securitisation vehicle, will be unaffected.

Thomas Cook, the UK travel group announced that a large part of insolvent German retailer, Arcandor’s 53 per cent stake in the company could be sold to institutional investors as early as next month as their creditor banks attempt to reduce their loan burden.

Arcandor’s banks, led by Royal Bank of Scotland, Commerzbank and Bayern LB were reported to be still in the market for find a strategic buyer for the company so that they could sell off their combined 44 per cent stake. –.

Demands for rented accommodation will grow to eventually reach than a third of UK households within a decade, doubling the number since 2005.

With public sector construction spending expected to weaken over the next 18 months, consumers who are unable or unwilling to purchase their own property will create a strong demand for rented homes. These predictions come from Gravis Snook, chief executive of Rok, the construction and maintenance group. "He continued "The model where the individual borrows large sums to buy a house that they never quite pay off is somewhat suspect."

The group had been in talks with a number of social housing groups regarding the establishment of joint ventures with institutional investors to profit from this demand.

The FTSE 100 was in consolidation mode yesterday rising just 3.89 points to close on 4689.67. The FTSE 250 also recovered slightly, rising 15.77 points to close on 8,370.25

The pound improved against the dollar, whilst taking a tumble against the rest of the major currencies.

• Pound/US dollar 1.6509
• Pound/Euro 1.1624
• Pound/Japanese Yen 155.3987
• Pound/Swiss Franc 1.7614

Research in Motion (RIM) designers and producers of the BlackBerry smartphone have won the coveted honor as the company to watch, by the highly ranked Fortune Magazine.

RIM, based in Canada were ranked first in a list of the fastest growing firms around the world, due to their tremendous success with the BlackBerry Curve in the US, where they hold a 74 per cent share of the business smartphone market.

The Dow Jones Industrial Average continued to recover from its collapse earlier in the week, rising a further 61.22 points to close on 9279.16. The NASDAQ also showed improvement up 13.32 points to close on 1969.24

Another interesting phenomenon was unveiled this week mirroring the unhealthy condition of the World’s leading economies. It has been reported that as the US economy has contracted and employment opportunities have considerably contracted, the number of Mexicans crossing into the US by legal and illegal means appears to have fallen considerably. Statistics show that the number of people legally entering the US from Mexico, mostly looking for work, has fallen by nearly 40 per cent since 2006 to an annual average of about 350,000. Even more compelling news is that according to official statistics, the number of people apprehended trying to enter the US illegally fell to 724,000 in 2008, the lowest since 1973.

While the Department of Homeland Security claim that the decline is related to tougher border protection efforts, however many claim that the slump in US economy is the real reason.

Oil prices dipped ahead of the latest US inventories data while base metals retreated after a sharp fall in the Chinese stock market

Demand for gold sank in the second quarter after jewellery consumption dropped by more than a fifth and investment interest slowed as the threat of meltdown in the global financial system receded

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Tags: Arcandor, Banking, BlackBerry, British airways, British Economy, British Pound, Co-operative, Co-operative Funeral care, Credit Crunch, Currency, Department of Homeland Security, Dow Jones, Economics, Financial News, FTSE, Gold, Gravis Snook, Money, NASDAQ, Northern Rock, Office of Fair Trading, OFT, price fixing, prison, Recession, Research in Motion, RIM, Royal Bank of Scotland, smartphone, Stock Markets, Thomas Cook, UK Banks, UK Economy, UK Recession, US economy