As had been widely predicted, the UK Monetary Policy Committee has chosen to hold interest rates at 0.5 percent as well as continuing with the existing programme of buying £175 billion of assets. The Bank of England will have to decide in November whether to continue expanding its programme of money creation and asset purchases.

Two of Britain’s biggest banks, Lloyds Banking Group and Royal Bank of Scotland face what could be a crucial month for them. Their future will be laid bare as they hear around the end of the month what Neelie Kroes, the EU Competition Commissioner, has decided exactly what concessions Lloyds must make as it integrates HBOS as well as ruling on the amount of state aid that Lloyds and RBS have received and what actions to take regarding the aid. Shares in RBS closed yesterday at 49.65 pence, down on the 50.5 pence value when the government acquired its 70 per cent stake. Shares in Lloyds closed on 95.66 pence, a poor performance compared with the value of 122.6 pence that the shares were sitting on when the UK government acquired the shares.

Financial services firms showed the first signs of recovery in the last three months, after almost two years of falling business volumes and profitability, according to a recent survey. Business volumes across the financial sector have grown for the first time in two years, although the survey showed that levels of business were still considered to be well below normal. Firms are more optimistic about the overall business situation compared with three months ago, but they remain worried that a lack of demand will hamper business expansion in the coming months.

According to rankings published today by the World Economic Forum (WEF) London now wears the mantle of being the world’s leading financial centre having wrested New York from its traditional first place The WEF’s highly respected and influential Financial Development Report, which ranks 55 global financial centres said that London was in first place, a result that surprised many, especially the UK capital’s leading European rivals, in France and Germany, who have fallen out of the top 10 altogether

According to a recent survey, consumer morale in the UK has risen to its highest level since April 2008. In general, the UK public were reported to be at their most regarding the future than at any time since way back in 2005. The Nationwide Consumer Confidence Index rose to 71 in September from an upwardly revised 65 in August reflecting an improvement in Britons’ sentiment about their present circumstances, future prospects and willingness to spend. Another guide, the Nationwide Expectations index, which gauges public sentiment regarding the economy, jobs as well as personal own finances in a six months period ,also rose, to 106 in September from 97 in August,, This was the highest level that the index had reached since December 2005.

A spokesman for Jaguar/ Land Rover announced on Wednesday that that the company succeeded in securing a £175 million loan from the State Bank of India and were on track to receive their planned total of £500 million of new financing facilities for 2009. The car company, owned by India’s Tata Motors said it had “been making significant progress” in raising new loans despite its current loss making situation. In addition to the £175 million loan from India, the company has also added a £56 million export financing facility with ABC International Bank. Tata’s ability to line up new financing for their luxury brands is vital as they seek to curtail their losses, as well as reduce costs and revive sales.

The FTSE 100 continued to rise, this time by 16.74 points to close on 5154.64. The FTSE 250 is strengthening in leaps and bounds, closing up a further 147.09 points to close for the day on 9,373.44.

The pound continued its minor recovery against the leading currencies, creeping slightly over the $1.60 mark.

• Pound/US dollar 1.6073
• Pound/Euro 1.10875
• Pound/Japanese Yen 142.0389
• Pound/Swiss Franc 1.6489

The Dow Jones index came back strongly on yesterday’s trading, closing up 61.29 points to 9786.87, down 5.67 points. The NASDAQ index also continued its steady rise, up 13.6 points to close on 2,123.93.

Jeans maker Levi Strauss has reported a 41% drop in profits after seeing lower sales and currency fluctuations. The San Francisco-based firm saw its net income for the third quarter fall to £25 million ($41 million) on turnover down 6% to around £700 million, with sales falling in both in the US and across Europe.

The European Union has intervened by pledging that any job cuts and factory closures at either Opel and Vauxhall factories will not influenced by levels of state aid given to Magna, who are in the process of buying the firm. The UK, Spain, Poland and Belgium governments have stated their concerns that the planned takeover of GM’s Opel will favour German factories and jobs as the German government have offered Opel’s would-be buyer Magna a £4 billion (€4.5 billion) loan. Recent reports have suggested that if the deal goes through, Magna plan around 25% of their 45,000 workforce in Europe

Asian central banks, worried about the effect of the weak dollar on their export industries, are believed to have intervened in the global currency markets in an attempt to slow the slide of the US currency. According to foreign currency traders, central banks in South Korea, Taiwan, the Philippines and Thailand have been buying the US currency; the falling dollar has become a problem for many countries as signs of economic recovery begin to emerge, with traders rapidly switching from the traditionally "safe" US dollar to other currencies. The dollar fell to a 14-month low against a basket of currencies on Thursday and analysts now believe that if other economic forces have not intervened till now, they soon will.

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