The announcements that Royal Bank of Scotland (RBS) and Lloyds Banking Group are to sell off hundreds of branches has added a smile to the face of.

Alistair Darling as well as the European Commission, who had insisted that the banks sell off some of their branches. In a recent statement, the chancellor confirmed his opinion that the sales, were in the "best interest" of the wider UK banking sector.

Lloyds will dispose of more than 600 branches over the next four years, while RBS will sell 318 of their high street outlets. The Spanish banking group, Santander will be allowed to bid for Royal Bank of Scotland’s branches when they are put up for sale. Under competition rules agreed between London and Brussels, Santander will be eligible to bid for some of the branches as the currently hold less than 8 per cent of the UK small business lending market. Meanwhile, Sir Richard Branson is reported to be interested in moving into the world of high street banking as his Virgin Money group has applied to the Financial Services Authority (FSA) for a banking licence.

There are even some contentious rumors around that no less a company than PayPal might find them on the UK high street. Reports have it that PayPal already have an EU banking license, granted to them in May 2007, so why not a place for the outsiders!

Britain’s fourth-biggest supermarket group, WM Morrison have sent a message to their major suppliers that they will be looking for increased support for their increased and more aggressive promotion campaigns, The campaigns are aimed to increase their market share in what has become an increasingly competitive market. Morrison’s move comes as the prices of basic food stuffs begin to drop.

Europe’s biggest low-cost airline Ryanair announced on Monday that it is considering slowing down its rapid expansion program, and instead break with tradition by distributing cash earmarked to buy new aircraft to their shareholders instead. The company raised the possibility of the strategic shift while announcing a 46 per cent rise in second-quarter profits. The company has kept its full-year profit forecast steady, although they expect that figures for the third and fourth quarters will be less than rosy.

Sterling continued to weaken against the dollar, whilst rising slightly against the Euro and holding its own against the rest of the major currencies.

• Pound/US dollar 1.6398
• Pound/Euro 1.1168
• Pound/Japanese Yen 148.3102
• Pound/Swiss Franc 1.6874

The FTSE spent time under the 5,000-point mark on Tuesday with banking stocks taking the biggest toll. At close of trading, the FTSE 100 was seen to be holding its own on 5,037.2.

The FTSE 250 continues to suffer from a consistent run of heavy losses, falling more than 15% of its peal of 10,000 just a few weeks ago. At close of trading yesterday it was sitting on 8,756.68.

Troubled US commercial lender CIT Group, filed for bankruptcy on Sunday after attempts at a restructuring or bail-out failed. In a statement, CIT, who have been a key figure on the American banking scene for more than a century, announced that they had requested that the court quickly confirm its prepackaged bankruptcy plan. The plan, which has broad support from its debt holders, and in particular from Carl Icahn its billionaire investor. Icahn has agreed to provide a $1 billion line of credit, allowing the company to remain confident that they would be able to emerge from bankruptcy by the end of the year.

The US Dow Jones index made some recoveries from the last two days trading; up 61 points to 9,774.1 The NASDAQ were also fairly stable, reaching 2047.46.

The market was taken by surprise by the announcement of a swing to profitability by the auto manufacturing giant Ford. The company posted its first quarterly profit in more than a year, thanks to the implementation of cost-cutting and the government’s “cash-for-clunkers” rebates helped produce earnings of nearly $billion, or 29 cents a share, during the third quarter. Shares in Ford closed up 8.3 per cent at $7.58.

Australia’s economy continues to be the rising star of the global economies, so much so that it central bank has increased its interest rate for the second consecutive month, up a quarter percent to 3.5%. The Australian economy is the only one in the developed world to expand in the first half of 2009, with the continent largely managing to steer clear of recession, only entering into negative growth for the last quarter of 2008. The bank’s confidence was justifiably increased by the release last week of the lowest inflation figures in Australia for 10 years.

The price of gold price hit a fresh record high on Tuesday as India agreed to buy 200 tonnes of bullion from the International Monetary Fund. The move caused traders to speculate that there would be further purchases by the emerging economies. India’s purchase valued at around $6.7 billion, accounts for half of the IMF’s expected disposal of gold and signals a growing appetite among developing countries’ central banks for bullion in the wake of the global economic and financial crisis, coming after China had revealed earlier in the year that it had quietly almost doubled its gold reserves to become the world’s fifth-biggest holder.

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Tags: Alistair Darling, Bank, Banking, British Economy, British Pound, Bullion, Carl Icahn, cash for clunkers, CIT Group, Credit Crunch, Currency, Dow Jones, Economics, Economy, EU banking license, European Commission, Financial News, Financial Services Authority, Ford, FSA, FTSE, Gold, Government, Interest Rates, International Monetary Fund, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Paypal, RBS, Recession, Retail, Royal Bank of Scotland, Ryanair, Santander, Savings, Sir Richard Branson, Stock Markets, Stocks and shares, UK banking sector, UK Banks, UK Economy, UK government, UK Recession, Virgin, Virgin Money group, WM Morrison

The government plan to create three new High Street banking chains, The move is expected to be in effect by 2015 as part of a major overhaul of the sector. The new banks will be recycled from the salvageable parts of Royal Bank of Scotland, Lloyds and the Northern Rock Building Society, all of which are majority owned by the UK taxpayer. Currently UK Ministers and the European Competition Commissioner are in talks over the move, which is aimed to recoup as much of the public’s money invested in the banks. The new chains will be standard retail banks concentrating on deposits and mortgages, with such "clean" UK high street retailers as Tesco and Virgin taking a share of the action.

According to the latest Land Registry figures, house prices rose by a further £1,400 in September, a 0.9% increase in prices last month, as the gradual recovery in the property market continued. The increase succeeded in pulling the annual rate of decline down to 5.6%, from its peak decline of minus 16.3% recorded in February 2009. The average house price has risen by £7,029 to reach £158,377 since that low point. Prices in London roses at the fastest rate, 1.3%, bringing the average price of house in the capital to £314,954, down 3.2% from the same period of a year ago.

The first phase of an increase on Air Passenger Duty went into effect on Sunday, that will effect only travelers who use British airports.

The increase, which at first glance appears fairly minor, a mere pound on short haul fights in economy class , become more significant for long haul flights in business and first class cabins where it can rise as high as £30 pounds per passenger.

The price increase has been condemned by British airlines and travel groups as one.

Sterling slumped yesterday against the dollar, as well as the rest of the major currencies.

• Pound/US dollar 1.6447
• Pound/Euro 1.1164
• Pound/Japanese Yen 148.2155
• Pound/Swiss Franc 1.6883

The FTSE 100 retreated to a three-week low this week, due to increased concerns that a rally this year may have driven share prices higher than genuine prospects for economic and earnings growth. The FTSE 100 still remains 47 percent up on its year low, recorded in early March.

The UK’s FTSE 100 suffered a major fall on Friday, down 93 points, or 1.8%, to 5,045. The FTSE 250 was also rocked on Friday by a further heavy reversal after the previous day’s gains. The index fell 76.64 points to close on 8855.77

A drop in US consumer spending dampened the enthusiasm that followed Thursday’s US GDP figures. The figures wiped out gains made on Thursday sparked by data showing the US economy was growing again. The US Dow Jones index lost 250 points, or 2.5%, to 9,713. The NASDAQ also lost most of last week’s gains, down 52.44 points to 2045.11

US consumer spending dropped by 0.5% in September after a 1.4% rise in August – the first fall in five months. The news confirms analysts fears that the financial recovery in the US propelled by stimulus-driven gains in consumer spending and home building may not be as strong as predicted.

The price of oil also fell sharply on Friday, with US light crude dropping $2.87 to $77 a barrel.

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Tags: Air Passenger Duty, Bank, Banking, British Economy, British Pound, Credit Crunch, Currency, Dow Jones, Economics, Economy, Financial News, FTSE, Gordon Brown, High Street banking, House Prices, Land Registry, Lloyds, Lloyds Banking Group, Money, Money Markets, NASDAQ, Northern Rock Building Society, Oil, property market, Recession, Retail, Royal Bank of Scotland, Stocks and shares, Tesco, UK Banks, UK Economy, UK government, UK Recession, Virgin

Officials at BA as well as most of all the major carriers must be scratching their heads in disbelief and asking themselves” How did they manage to do that?” The “they” in question are Virgin Atlantic, who has just announced that they have made a substantial profit for their financial year to the end of February. A spokesman for Virgin announced that the company’s results had been aided by a by a rise in premium fare passenger traffic and more substantially by Virgin having the foresight to pre-purchase their fuel and therefore not falling victim to price fluctuations which saw oil rise to $147 a barrel during the financial year.

Group turnover, including input from the tour operation offshoot, Virgin Holidays, increased by 8.4% to £2.579billion from £2.38billion in the previous financial year. Annual pre-tax profits for Virgin Airlines reached £68.4milion compared to £34.8million in the 2007/2008 financial year.

The political manoeuvring regarding the uncertain future of the GM owned car manufacturers has become hot enough that UK business secretary. Lord Mandelson, has seen fit to intervene, Mandelson announced that the UK government’s commitment to all of Vauxhall’s plants should be regarded as clear.

Producer of frozen Yorkshire puddings as well as a variety of ready- made foods Greencore, have announced that they will “rebasing” their dividend that will see it drop by 50 per cent of earnings per share this year for the half-year to March, Greencore announced a pre-tax loss of £23.8million compared with a profit of £19.8million the previous year, on revenue that fell 15 per cent to £450 million. Greencore’s swing from profit to loss was caused by restructuring costs.

As the FTSE returned to work after the holiday weekend, consumers favourite, Tesco led a rally in consumer-related shares, climbing 3.5 percent to 363.3 pence. Sainsburys, the U.K.’s third-largest supermarket chain, increased 1.8 percent to 318.5 pence. The world’s largest catering company Compass Group Plc rallied 2.3 percent to close on 369.25 pence.

Bank shares did less well with Royal Bank of Scotland declining 1.7 percent to 40.2 pence, while Lloyds dropped by 2.6 percent to 66.8 pence. The declines were largely due to the reports that they reputedly made to the U.K. treasury that they are liable to fail to meet the lending targets set this year which were a condition of receiving further financial support.

All in all, shares on the FTSE made a minor recovery after heavy falls before the holiday weekend and early falls as the market opened. The U.K. FTSE 100 index rose 46.43 points, to close at 4,411.72, and the FTSE250 closed on 7,530.02 down 11 points from Friday. The pound was almost static against the dollar yesterday, and rose sharply against the Euro as well as the Yen and the Swiss Franc.

· Pound/US dollar 1.5938
· Pound/Euro 1.1433
· Pound/Japanese Yen 152.3512
· Pound/Swiss Franc 1.735

In New York, U.S. stocks surged, with a sharp rise in consumer confidence to its highest level since September last year, despite a further fall in house prices.

Optimism soared as the dollar recovered some ground against the euro on Tuesday, pulling away from a five-month low.

The Dow Jones closed on Tuesday on 8473.49 surging a massive 196.17 points on the day, while the NASDAQ climbed 71.8 points to 1750.43

General Motors continues to struggle to find respite from possible chapter 11. The company announced that they have failed to persuade sufficient bondholders to accept a debt-for-equity swap, setting the stage for what looks like being the USA’s largest-ever industrial bankruptcy. Final decision on the tender offer has to be made by midnight Wednesday.

Fast growing internet based social network, Facebook announced on Tuesday that they had accepted a $200million investment offer from a, a private Russian internet investment group Digital Sky Technologies. The, 1.96% equity stake investment, gives Facebook a preferred stock valuation of $10billion. There must have been few smiles at Microsoft, who paid $240million for the same 1.96% equity stake as recently as 18 months ago.

In Europe, the announcement that French and German consumers are keeping up their spending in the face of the severe recession has provided some comfort to investors, with this latest evidence suggesting that the sharp contraction in European industrial production has yet to filter through to the broader economy.
Consumer spending in the sixteen member eurozone has been helped along by government measures that allow companies to maintain labour levels, as well as encouraging consumer spending, particularly on new cars.

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Tags: Banking, Financial News, FTSE, Stock Markets, Stocks and shares, Virgin