Recent figures have shown that insurers paid out £650 million from 335,000 claims, with most of them were caused by the wintry weather in the UK this year. According to the Association of British Insurers (ABI), the biggest chunk of the payout was to motorists whose vehicles were damaged vehicles on the slippery roads during January, which was the eighth coldest month on record and the UK’s worst since 1987. The ABI went on to confirm most of the £650 million claims were from 18 December to 13 January when the number of homes, vehicles and businesses all experience damages as a result of the winter weather. Specifically, £395 million was paid out to motorists from 268,400 motor insurance claims.

A new round of tougher stress tests have been ordered by regulators for the UK banks to make sure that if a forecasted "double dip" in the UK economy should occur , they will be able to withstand it in better shape than they did in the " first dip." The banks will be required to prove that their "tier core one capital ratio" would be capable of remaining above the minimum four percent level even if the economy contracted an additional 2.3 percent. These figures were part of a projection provided by the Financial Services Authority said in their annual Financial Risk Outlook.

Official statistics revealed on Thursday that UK industrial output fell 0.9% in January, making for the first drop in five months. The news out a damper on speculation of continued expansion of industrial output, and put further strain on the pound which is still hovering around the $1.50 mark.

The British Property Federation (BPF) has warned against possible abuse of insolvency practices in Britain’s frail real estate market as profitable tenants seek to renegotiate leases signed in better economic times.

The industry body, representing blue chip landlords such as Land Securities and British Land, has condemned the trend. A spokesperson for the BPF explained their standpoint as follows. "Landlords are caught between rock and a hard place when it comes to bailing out occupiers at the expense of their shareholders or facing the prospect of empty space and the costs that come with it,"

BPF has called for tightening of insolvency rules that she said unfairly penalised property company shareholders, among them under fire pension funds, for badly negotiating leases.

Sterling continued to be in the doldrums, with the pound closing yesterday up slightly on $1.5123 while falling against the Euro to €1.1011.

On the FTSE, the star of the show was undoubtedly the Tullett Prebon Company. Tullett Prebon are an interdealer broker, whose shares rose by 25.7% as speculation mounted that the company was in the throes of talks regarding a possible sale of the company to with the Bank of China being marked as potential bidders.

UK equities continued to rally in midweek, despite the weaker-than-forecast manufacturing data. Investors appeared to be focusing their efforts on the financial and mining sectors.

The FTSE 100 index took on 23.0 points to close on 5617. 26 it’s highest level since June 2008, closing at 5,617.26.

The US government announced that they had recorded a budget deficit of $221 billion (£147.6 billion) in February, making for their largest monthly deficit in s history.

Figures from the US treasury now show that the United States total deficit since the beginning of the fiscal year which began in October 2009 now stands at $651.6 billion, putting it well on track to beat last year’s record annual budget deficit of $1.4 trillion, with Treasury Secretary Timothy Geithner calling the deficit "unsustainable".

On the Wall Street the Dow Jones Industrial Average dropped back a little, down 21 points to close on 10,566.95. The NASDAQ Composite was still climbing, rising just 9 points to close on 2,356.27

China’s exports jumped by 46% in February compared with a year ago, raising hopes of a strong recovery in global trade.

The increase was higher than analysts’ expectations of a rise of between 35% and 40%.

It is likely to increase pressure on the Chinese government to raise the value of the yuan, which the US in particular complains is undervalued.

China’s imports also rose strongly, increasing by 44.7% last month

Microsoft founder Bill Gates must have been feeling a little dizzy yesterday after it was announced that he had been knocked down from one of his many pedestals, This one was to second place in Forbes magazine’s billionaire’s list, and not by his close friend US investor Warren Buffet who was in third, but by Mexican telecom giant Carlos Slim, which made for the first time since 1994 that an American has not led the who has got the most cash rankings. Mr Slam’s fortune rose by $18.5 billion (£12.4 billion) from last year to $53.5 billion. The Gates fortune now totals $53 billion, while investment guru Buffet has fallen on hard times, now worth only $43 billion.

2009 was all in all a tough year for billionaires with 332 of them being reduced to being mere multi-millionaires, while around two hundred news ones being accepted to the club, according to the Forbes list.

In the UK, the sixth Duke of Westminster Gerald Grosvenor remained the wealthiest Briton with a net worth of $12 billion as he improved his finances by $1 billion despite the UK property slump. The improving health of the global economy meant that 55 countries were represented in the Forbes, among them China. In fact if you take in Hong Kong, the Chinese now account for 89 of the world’s billionaires, second only to the United States with 403 billionaires.

One or two of them must come from the Chinese automotive industry, which increase capacity at an alarming rate in order to meet demand. Changan Automobile, the 4th largest domestic producer by sales (and a strategic partner of Ford) announced 2009 total revenues up by 88.4%, with an almost two-thirds increase in total units sold. Announcing the figures, the company also said that they expect liberal government policies will continue to support industry growth at the present pace for the foreseeable and that facility expansion will likely continue. Changan is not alone in ramping up capacity, with the Chery Company announcing the launch of a new factory in Mongolia despite the fact that their new facilities in Wuhu and Dalian have not yet been completed. Chery are best known for their range of compact cars.

Signals from Beijing do seem to indicate that the automotive industry will continue to receive special support even as tightening measures are implemented broadly. In a newspaper interview yesterday, a spokesperson for the Ministry of Industry reaffirmed the Chinese government’s commitment to provide subsidies for green automotive technology to help achieved the official target of half a million green cars before 2013.

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Tags: Association of British Insurers, Bank, Bank of China, Banking, Bill Gates, British Economy, British Land, British Property Federation, Carlos Slim, Credit Crunch, Dow Jones, Economics, Economy, Financial News, FTSE, Insurance, Land Securities, Microsoft, Money, NASDAQ, Recession, Retail, Tullett Prebon Company, UK Banks, UK Economy, UK Recession, US Government, US Treasury, Wall Street, Warren Buffet

According to a recent survey conducted by the Confederation for British Industry (CBI), around a third of the UK financial services companies were said to be more optimistic about their situation and that of the sector in general. This makes for the third consecutive quarter that confidence has risen in the financial services industry, making for a 100% increase since the middle of 2009. The increased optimism comes despite slightly weaker volumes being recorded than forecast in the fourth quarter, coupled with some fears that business will contract in the first quarter of this year.

There were smiling faces all around as retailer House of Fraser delivered a trading update on Monday showing a new record for festive sales. Signs that the UK consumer was shrugging off the recession came as the privately-owned department store chain showed sales rising by 7.1 percent in the eight weeks to Jan. 2nd as well as Boxing Day sales figures that were up climbed 27 percent on 2008.

Less happy were the management team at, Tesco, who according to a global study has dropped to fourth place in a league table of the world’s biggest retailers. Tesco dropped one place pushed down by the German retail group, Metro. Sales figures for Tesco for the six weeks to January 9 is expected to report like-for-like sales growth of about three percent for the period.

Some good news for those UK householders whose boilers are rated at G level or lower. In addition to the two combined subsidies from the UK government and British Gas that is liable to cover around a third of the estimated cost of buying and installing a new boiler, British Gas has just added a further £452 in cost savings for those who will be replacing their boiler under the scheme which will come in two forms.

• A set of comprehensive radiator controls for the home or office valued at £248.
• Homecare 200 repairs cover for the boiler costing £204.

Anyone who is liable to receive these subsidies, which in general should include anyone who has a boiler more than 15 years old may be eligible to receive these grants and subsidies, contact British Gas on 0845 074 5991 for a free consolation or click http://www.britishgas.co.uk/yourboiler

Spanish banking group Santander has announced the launch of a marketing campaign aimed at bringing its UK brands under one name. Santander will invest around £30 million pounds refurbishing the 1,000 branches across the UK coming under their label as well as printing new product literature for the Abbey, Bradford & Bingley and Alliance & Leicester banks. To add some glamour, formula one racing driver Lewis Hamilton has been chosen to publicise the company’s new image at a Santander branch to be opened in central London.

Manchester United FC have announced their plans to mount a bond issue intended to raise £500 million in order to refinance the club’s mounting debts.

The announcement came as the club announced pre-tax profits of £48.2 million for the year to 30 June 2009, compared with a loss of £21.4 million last year. The profit was swollen by the £80 million fee received by the club from Real Madrid who purchased the services of Cristiano Ronaldo during the close season. According to information issued by the club’s holding company Red Football Ltd, group turnover rose to £278.5 million from £256.2 million in 2008. Although Red Football disclosed no total debt figure was announced, estimates have it at around £700 million.

British Land has unveiled plans to manage a £300 million pound buy-to-let fund being launched by Charles Russell, the prominent UK law firm. The fund has been established to acquire prime residential real estate in London. British Land will also take a small stake in the fund as the property group rapidly expands its residential business, marking British Land’s first residential investments since selling the majority of its portfolio in 2006.

Revenue at IT services group Computacenter remained weak for 2009, largely due to a shortage of large infrastructure projects. With this factor taken this factor into account, the company instituted a substantial cost-cutting programme which look likely to see them beat profit forecasts for 2009, which could be close to £50 million pounds. On the news shares in Computacenter rose 17.7 pence to 309 pence on Tuesday.

The pound continued its recovery above the dollar in mid week trading, while moving up slightly against the Euro.

• Dollar 1.6207
• Euro 1.118

On Tuesday the FTSE 100 Index fell 0.7 percent, to 5,498.71.

Meanwhile it has been announced that during one of the biggest turn-downs in US financial history the US Federal Reserve announce that they made a profit of $52.1 billion (£32.2 billion) in 2009, marking a rise of 47% over the previous year, allowing them to pay a record $46.1 billion to the US Treasury last year.

The $46.1 billion was the largest amount ever paid by the central bank since it was creation in 1914, and was largely thanks to the Fed’s attempts to support the financial system throughout the ongoing financial crisis.

The Dow Jones Industrial Average closed Tuesday up slightly, nine points to 10,627. The NASDAQ dropped to close on 2,282.

The recently formed US Financial Crisis Inquiry Commission (FCIC) is to hold their first public hearing on Wednesday.

The 10-member panel was established by Congress to examine the causes of the 2008 US financial crisis. The committee will examine the causes of the crisis, and are scheduled to hear testimony on the current state of the crisis from a cross section of private and public sector leaders.

Witnesses will include top executives from Goldman Sachs, JPMorgan Chase, Morgan Stanley and Bank of America.

Findings and the report of the panel are due to be presented to Congress and President Barack Obama by 15 December.

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Tags: Abbey, Alliance & Leicester, Bank, Bank of America, Banking, Barack Obama, boiler, Bradford & Bingley, British Economy, British Gas, British Land, British Pound, CBI, Charles Russell, Computacenter, Confederation for British Industry, Credit Crunch, Cristiano Ronaldo, Currency, Dow Jones, Economy, FCIC, Financial News, FTSE, Goldman Sachs, JPMorgan Chase, Lewis Hamilton, Manchester United, Metro, Money, Money Markets, Morgan Stanley, NASDAQ, Real Madrid, Recession, Red Football Ltd, Retail, Santander, Stock Markets, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, UK retail, US Federal Reserve, US Financial Crisis Inquiry Commission, US Treasury

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

There were one or two petted lips around Westminster yesterday in response to governor of the Bank of England Mervyn King’s call for Britain’s biggest banks to be split up to prevent the possibility of a financial crisis of similar proportions to the one that the UK is going through, in the future. Particularly peeved were Gordon Brown and Alistair Darling who even went as far as rebuking. Mr. King for his comments. King was seemingly unfazed at their comments.

According to Terry Duddy, chief executive of Home Retail Group, owners of the Argos and Homebase chains, the rise in VAT due on January 1 could act as a major for sales of large value items in the weeks leading up to the increase. Whilst announcing that the company had returned to profit in the six months to August 29, , Duddy said went on to announce a rise in consumer confidence and that his company was more optimistic about the outlook for the fourth quarter.

Chocolate kings, Cadbury have subtly increased the pressure on Kraft to raise its proposed £10 billion ($16.6billion) takeover offer. They did so through reporting unexpectedly strong third-quarter trading figures, surpassing even the toughest analysts’ expectations, The Company have succeeded in raising its full-year revenue targets to the “middle” of its 4-6 per cent goal range. Cadbury announced quarterly revenue growth of 7 per cent, which they claimed had been achieved by increasing prices and profit margins, despite a fall in turnover for the period of percent. Correspondingly, Cadbury had made considerable efforts to cut costs and reduce market spending. Since Kraft announced its offer proposal in early September, indications are that investors expect the US food group to pay at least 800 pence per share, while the current cash and shares proposal values Cadbury’s equity at 731pence a share. In the light of the recent results, some investment banks have revalued the target price on Cadbury to 900 pence, however a Kraft offer at this level is considered unlikely, unless counter-bidders suddenly emerge. The consensus is that Kraft will succeed with their offer, if it comes back with a 50-50 split of cash and stock bid of around 825 pence per Cadbury share. Kraft are understood to be considering returning with a formal offer but may wait until after its third-quarter results on November 3, while the UK Takeover Panel has set Kraft a final deadline of November 9 to make a formal offer.

Sterling continued its steady rise against the ever weakening dollar, recovering against the Swiss Franc. whilst faltering against the Euro.

• Pound/US dollar 1.6606
• Pound/Euro 1.1093
• Pound/Japanese Yen 151.6918
• Pound/Swiss Franc 1.6587

The FTSE 100 lost out on some of yesterday’s gains, down 33.79 points to close on 5257.85 The FTSE 250 25 shed all of the previous days gains. Down 143.60 points to close on.9421,04

Morgan Stanley has returned to profit after three quarterly losses in a row, after reporting a net income of £457m in the third quarter of 2008. The bank’s investment banking division fared particularly well with underwriting revenues up 74% from 2008 levels. Meanwhile, Wells Fargo, the country’s fourth-largest bank, reported record $3.2bn profits for the quarter, reporting that revenues from mortgages and consumer credit had surged.

Despite that positive news, the Dow Jones was down for the second consecutive day, yesterday by 92.12 points to crash below the ten thousand points on 9949.36. The NASDAQ Composite index also continued to fall, this time by 12.74 points to close on 2,150.73.

Recent reports continue to speculate that US companies who received billions of dollars of government aid in the financial crisis are to be forced to cut any excessive salary packages awarded to their leading executives. Of the seven companies that received the highest aid from the US Treasury will be obliged to reduce the basic salaries of their 25 best-paid employees, by up to nine tenths of the salary packages, while each firm’s 125 top earners would be see their pay slip cut in half, under the US government plan. There has been widespread outrage in the US over the high level of bonuses paid by firms that not so long ago were forced top go to the government cap in hand and ask for government help to stave of bankruptcy .

Figures just published confirm that China has exceeded its target for economic growth in the third quarter, for the first time this year. Chinese government figures show year on year GDP growth was up 8.9% from 7.9% in the previous quarter. Chinese officials have also said they are sure they will reach their full year target of 8% for economic growth, with the economy grewing by 7.7% in the nine months to September.

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Tags: Alastair Darling, Argos, Bank of England, Banking, British Economy, British Pound, Brown, Cadbury, Currency, Darling, Dow Jones, Economics, Economy, Employment, Financial News, FTSE, Global Credit Crisis, Gordon Brown, Home Retail Group, Homebase, Kraft, Mervyn King, Money, Money Management, Money Markets, Morgan Stanley, NASDAQ, Recession, Terry Duddy, UK Banks, UK Economy, UK government, UK Recession, US Treasury, Wells Fargo

It now seems likely that the Financial Services Authority, the Government appointed body appointed to control the UK banking system seem to have become a little weak at the knees, with the announcement that their remuneration code, due to be released today, does not fully focus on requiring bank boards and management to link remuneration and especially bonuses more closely to risk

Their reaction appears to come after the CEO of the largely state owned RBOS Stephen Hester announced that if leading bank executives are not offered bonuses and salaries in keeping with their market value, they will leave the industry.

According to FSA chief executive Hector Sants, the FSA’s new guidelines are designed to ensure that boards prevent management from introducing compensation policies that, in effect, subordinate the interests of capital providers to those of employees.

But the final version will step back from the March draft’s specific recommendations that two-thirds of each bonus should be deferred and that individual rewards take into account the overall performance of a firm rather than just that of the individual or division, people familiar with the code say.

No more free holidays to Lichtenstein and a visit to the safety deposit box seem likely to happen for UK tax dodgers as the HM Revenue & Customs agree a deal geared to recover lost tax income. Up to £3 billion of taxable income is believed to have been secreted away by more than 5,000 British investors to be held in the vaults in this tiny land –locked European principality. With the exchange of information now guaranteed, these naughty investors will be offered the chance to volunteer details of their deposits in return for penalties, which will arrive at no more than the 10% of tax evaded on the money deposited over the past 10 years. As part of the reciprocal agreement the three Lichtenstein investors holding money in UK bank accounts will be presented with a free "kiss me quickly" hat by Chancellor Alistair Darling.

Europe’s largest defence contractor BAE Systems announced that they have been awarded five-year contract from the US army that will be worth around £1.32 billion. The contract is to supply sensors designed to allow all weather and night sight operation. All in all, yesterday was a big day for BAE Systems, with the announcement that their portable laser target locator had also been selected by the US Army for a separate five-year rolling contract that will be worth up to £250 million, while in the UK BAE Systems secured a 10-year partnership deal worth £369.5 million to support navy and air force torpedoes.

Despite the global tightening of defence budgets, BAE has continued to take a growing share of the market, with sales increasing by 28 per cent to £9.9 billion for the year.

An overwhelming increasing demand to generate energy from waste has encouraged the New Earth Group Company to float a rights issue intended to raise £15 million to fund expansion.

The New Earth Group plans to use the funds to develop new power plants to recover energy from waste that will operate alongside its existing waste treatment and composting business.

The company management’s conviction that there will be a demand for energy generation from waste comes as government regulations force businesses to find alternatives to landfill, and as the quest to cut greenhouse gas emissions intensifies.

The first stage looks likely to be a large new waste treatment facility based in Avonmouth, scheduled to begin operation pen in 2011.

Hanson, the heavy building materials company have announced that they will be putting their building products companies up for sale as the malaise haunting the UK construction industry continues. Hanson have been the dominant operators in the UK’s brick and cinderblock market for many years and consequently have been hard hit by the downturn in building starts.

A spokesman for Hanson UK announced that the company hoped to complete most of the sell-offs by the end of 2009.

The FTSE 100 continues to decrease in value, yesterday down 50.86 points to close on 4,671.34.

Meanwhile the FTSE 250 was losing ground after a run of gains. On Tuesday it dropped like a stone, down 118.35 on 8,302.66 at the end of the day.

Sterling fell for a fourth-consecutive session as data continued to point to inflationary trends.

• Pound/US dollar 1.6506
• Pound/Euro 1.1652
• Pound/Japanese Yen 158.0089
• Pound/Swiss Franc 1.7834

In the US, reports from Department of Labour show that in the second quarter of 2009 productivity rose at its fastest annual pace six 2003. The figures show that the average workers’ hourly output rose at an annual rate of 6.4% in the period from April to June. However, the figure for the first quarter of 2009 was revised downwards, to an increase of 0.3% from an initial estimate of 1.6% growth, while labour costs fell 5.8% on an annual basis during the same period.

Financial stocks led the way for the worst day in Wall Street since early July, amid some signs that the financial crisis is still around. Suffering particularly were the US Banks d after the Congressional Oversight Panel hinted that the US Treasury had not done enough to relieve them of toxic assets.

On Tuesday’s trading, the Dow Jones index continued to lose some of its value down a considerable 96.5 points, to 9241.45. The NASDAQ also continued to drop well below the 2,000 mark, down 22.51 points to close on 1969.73.

Crude oil prices have fallen again, on OPEC’s announcement that they anticipate demand to decline further than predicted next year, with renewed forecasts of 27.97 million barrels per day for 2010.

On the news, US light crude dropped $1.15 a barrel to $69.45, while London Brent finished $1.04 lower at $72.46.

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Tags: Alastair Darling, Alistair Darling, BAE Systems, Banking, British Economy, Credit Crunch, Currency, Dow Jones, Economy, Employment, Financial News, Financial Services Authority, FSA, FTSE, Hanson UK, HM Revenue & Customs, Money Markets, New Earth Group, RBOS, Stephen Hester, UK Bank Accounts, UK Banks, UK government, US Banks, US Treasury, Wall Street

There was little or no news around as the FTSE closed its doors for their annual spring holiday. There was much anticipation that tomorrow will see a continuation of the steady recovery that has now gone on for the last few weeks, especially on the announcement that the US treasury look set to purchase around one trillion dollars of healthy ( at least for the time being) assets from the banks. Experts have it that this will create the final major push that will eventually extricate the American as well as the global economy from the severest recession seen in more than sixty years.

It was just like the French to spoil a holiday, and this they almost did with the announcement that their state-controlled utility body EDF is considering disposing of its electricity distribution business in the UK, in a move to reduce its heavy debt burdens. Seemingly the matter was raised at the company’s recent board meeting, when the proposition of disposing of the network, which is the largest in the UK, was mooted. The apparent reason is that EDF are finding themselves temporarily strapped for cash, after a series of acquisitions, the most recent being the €15bn purchase of British Energy.

Overall EDF are reported to be planning to offload assets worth around €5bn in disposals, to reduce their debts that currently amount to almost €25bn.
The recently bankrupt Chrysler group has hastened to announce that their UK operation was in a healthy position despite their US parent group having called for Chapter 11 protection on Friday.

The UK offshoot, based in Milton Keynes and with a work force of around seventy, announced that they were in close contact with the company’s dealerships around the UK as well as any customers who have been in contact concerned about outstanding warranties and the availability of spare parts. In 2008, Chrysler UK sold over 13,000 vehicles.
Sterling rose slightly against the dollar yet slipped back against the Euro, whilst holding its own against the Japanese Yen and the Swiss Franc:

· Pound/US dollar 1.504
· Pound/Euro 1.1204
· Pound/Japanese Yen 148.43
· Pound/Swiss Franc 1.6919

On Wall Street shares enjoyed another relatively buoyant day with the Dow Jones Average rising another 214.33 points to close at 8426.74. The Nasdaq also rose by 44.36 points to finish the day at 1763.56.

Stateside yesterday, President Obama announced a proposal that will effectively outlaw certain loopholes designed to allow offshore tax-avoidance. The move is expected to affect US corporations with overseas divisions. Obama’s proposal is intended to disallow certain tax deductions for firms whose profits are earned in countries with lower tax bands than that of the US.

The US Treasury will be employing almost one thousand additional federal agents to enforce the new legislation, which is likely to bring an additional £140billion laws, ($210bn) in tax revenue over the next ten years

In overnight trading in Asia, encouraging signs continued. Shares in the Taipei exchange closed at the highest levels since September 2008, buoyed by investor confidence of closer ties with Beijing Yesterday advance left the benchmark up 38 per cent since the beginning of 2009.

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