UK interest rate expected to remain unchanged in June

June 4th, 2009 by admin | Filed under Daily News, Recession, Stocks and shares, UK Banks.

moneyinfo1 As it can’t possibly get any lower, and no one can really afford for it to get any higher, it is expected that those people who bear the awesome responsibility of setting the Bank of England’s interest rate are expected to retain the status quo at 0.5% for the third consecutive month. Financial analysts are focusing more on the anticipated statement from the BOE on money circulation, and if any more money would be injected into the UK economy after last month’s announcement that a further £50 billion would be made available.

The Barclay’s pension scheme sage seemed to be reaching a conclusion, with the announcement made yesterday that the bank intended to close its final salary to their existing members. Barclay’s move, if successful, is seen in economic circles as likely to clear the way for other major employers to take a similar step.
Barclay’s group chief executive, John Varley, announced in a letter to group sent to the bank’s employees that he ” had reluctantly come to believe the move was necessary because the current scheme had become untenable” The bank’s pension scheme had reversed from being £200 million in the black to over £2 billion in the red within the space of 12 months.

Varley went on to explain that “allowing the current scheme to continue would threaten not only Barclays’ ability to meet pension promises to its workers but also both the sustainable profitability and the sustainable capital ratios of the group.

Meanwhile, the trade union acting on behalf of the bank’s employees, Unite, announced that the move was being regarded by them as a breach of contract.
When speaking of wage bills and pensions, everything fades into insignificance when we get around to talking about the Premier League. As the season winds down to a halt and wage bills are being added up, it was announced that they have exceeded the £1 billion mark for the first time in the leagues star studded history. However analysts agree that season 2008/2009 may have witnessed a peak for what is currently regarded as Europe’s top soccer league. The weak pound and the forthcoming 50% tax band make plying their trade in the UK a lot less attractive for the superstars of the European arena.

Chelsea who only succeeded in winning the FA cup had the dubious distinction of topping the wage bill league, laying out £172 million on salaries. Champions Manchester United who also won the league cup paid out £121 million to their superstars. Not bad value when compared to the £101 million spent by Arsenal and the almost measly £90 million spent by Liverpool who didn’t manage to take home a single domestic trophy.

The only sanity that can be drawn from these figures is that the wages-to-revenue ratio dipped to 62 per cent, as revenues spread across the twenty clubs that took part in the league grew by 26 per cent in the 2008/2009 season to reach £1.9 billion.

The company handed the responsibility of running the UK’s mainline rail network, have announced that they have succeeded in reducing their operating costs by £360 million in the financial year up to March 31 2009.

Network Rail have been struggling for some time to bring the soaring price of running the system under control, under pressure by the UK regulator, and while the figures are commendable the fail to meet the target set to cut unit costs by 31 per cent over the five years to the end of March. This was the first time that Network Rail has failed to meet the target.

The FTSE 100 had not a bad day on Wednesday rising 41.56 points to close on 4424.98, while the FTSE 250 reached 7688.19
The pound continues to flatter against the dollar but less so against the Euro

Pound/US dollar 1.6393
Pound/Euro 1.1498
Pound/Japanese Yen 157.843
Pound/Swiss Franc 1.7477

US stocks fell on Wednesday as Federal Reserve chairman Ben Bernanke called Congress to immediate action to reduce long-term budget deficits.
The Dow Jones was down 65.59 to close on 8,675.28, while the
NASDAQ fell by 10.88 to close at 1,825.92