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.

financial

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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

In an unprecedented move, the Department of Health and the Treasury have invited companies in the private sector to submit tenders to take over and run a large National Health Service (NHS) hospital. The contract will be all inclusive, taking in the accident and emergency as well as the maternity wards. The Hinchingbrooke Hospital, in Huntingdonshire comes under the auspices of the East of England strategic health authority who anticipate bids from the NHS as well as the private sector.

Investors are rushing to capitalise on the hedge funds industry’s resurgence resulting in a huge increase in investment in the second quarter. It is reported that more than $142.5 billion has been allocated to hedge funds over the past three months, making for one of the industry’s most significant inflows of client money to date, according to a recent report.

In transport and tourism, signs are afoot of long hard winter ahead, Ryanair, Europe’s largest low-cost people carrier, have announced that they will be cutting their services at their largest bases London Stansted and Dublin. Ryanair are making the cuts as it attempts to cut back on routes that are making losses as well as to benefit from reduced airport charges.

Michael O’Leary, the group’s chief executive, has blamed the cuts on planned increases in air passenger taxes in the UK and Ireland. “Sadly, UK traffic and tourism continue to collapse while Ryanair continues to grow traffic rapidly in those countries that welcome tourists instead of taxing them.” Announced O’Leary.

Despite he recent bout of warm weather and the thirst that it brings, the pace of pub closures in Britain continues to grow. Recent statistics show that closures have risen by a third during the first six months of 2009. In terms of figures, that means that more than 50 UK pubs are pulling their last pint every week.

Local family owned pubs appear to be the most vulnerable , closing their doors at a rate of 40 a week. There are now only 53,466 pubs left trading in the UK compared with 58,600 three years ago.

On the FTSE on Wednesday, tobacco stocks were leading the way, with Imperial Tobacco gaining 2.6 per cent to £16.74.

Europe’s largest drug maker GlaxoSmithKline announced their eagerly anticipated half-year results which turned out better than expected, pushing their share value marginally up by 0.3 per cent to 1163.

Commodities fell after a strong run of the last few days, largely due to profit taking.

In the banking sector, profit warnings from US banking groups Wells Fargo and Morgan Stanley disappointed investors, contributing to losses on the major US exchanges.

Barclays shares fell by 3 per cent to 300p as investors began to shy from its aggressive push towards financial independence, while the other banks also weakened. Lloyds Banking Group lost 3.1 per cent to 71.2p, while Royal Bank of Scotland dipped 0.1 per cent to 39.8p.

Overall shares in London recovered from early losses on Wednesday. The late recovery was attributed to the surprise announcement that US house prices has risen during May.

The FTSE 100 rose 13.13 points to 4,494.30, while the FTSE 250 continued its steady increase, gaining 42.23 points to 7,784.81.

Early falls in sterling following a press report that two UK banks require additional funding were arrested with the announcement that the Bank of England had decided to maintain its asset purchase programme.

• Pound/US dollar 1.6422
• Pound/Euro 1.1578
• Pound/Japanese Yen 154.0592
• Pound/Swiss Franc 1.7528

On Wall Street, there was a flat atmosphere on the announcement that Morgan Stanley had made a loss of $159m (£97m) for the second quarter, a significant setback when compared to the $698m profit the Wall Street bank made in the same period of 2008. Not only was it the third consecutive loss for Morgan Stanley, but it was also much worse than analysts had feared.

Morgan Stanley attributed the loss to the heavy cost of repaying government funding and comes after a number of other major US banks reported significant rises in profits.

The poor results at Morgan Stanley caused a knock on effect , with shares in Bank of America, JP Morgan Chase and Morgan Stanley on the decline.

On Wall Street , the Dow Jones dropped by 34.68 points to 8881.26 while the NASDAQ limped forward a mere 10.18 point to close on 1926.28..

Public sector workers in California were out in protest at the billions of dollars of spending cuts that form the basis of the state’s controversial budget deal.

The cuts, including $6billion in education spending, were reached as part of an agreement to reduce California’s record $26.3billion ,( £16bn) deficit.

Arnold Schwarzenegger, the state’s governor has been forced to write promissory notes to their creditors after running out of money. Public employees have had to take unpaid leave and the state’s credit rating has been slashed to near junk status, giving it the worst rating in the US.

Ahead of the latest US weekly inventories oil prices fell while d gold consolidated below the $950 an ounce level

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Tags: Bank, Banking, Barclays, British Economy, Commodities, Credit Crunch, Currency, Department of Health, Economics, Economy, Financial News, FTSE, GlaxoSmithKline, Hinchingbrooke Hospital, Lloyds, Money, Money Markets, Morgan Stanley, NHS, pub closures, Recession, Ryanair, Stock Markets, Stocks and shares, transport and tourism, Treasury, UK Banks, UK hospitals, UK Recession, Wells Fargo