Finance Matters

• 23Sep

  Dollar falls to one-year euro low

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  From The BBC:

  The US dollar has fallen to a one-year low against the euro ahead of the G20 meeting of world leaders.The dollar dropped to $1.4840 against the euro and it also fell against a basket of other currencies. Traders have been switching to other currencies as signs of economic recovery have begun to emerge, with many countries having exited recession. New Zealand has became the latest nation to end its recession, joining the likes of Germany, France and Japan. The New Zealand dollar rose to its highest level against the US currency for 13 months, after the country unexpectedly pulled out of recession in the second quarter of the year. The New Zealand dollar rose by more than a cent to $0.7315, its highest since early August 2008. Against the Japanese currency, the dollar fell to 90.90 yen from 91.24 yen, while the British pound rose to $1.6366 from $1.6352. The low yield status of the US dollar has also prompted speculators to sell it ahead of a Federal Reserve decision on interest rates du…

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• 23Sep

  Germany facing ‘muted’ recovery

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  From The BBC:

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  Germany faces ‘bumpy’ recovery
  Germany’s economy has stopped its “free fall” but any recovery will be “muted” and take a long time, the head of the country’s central bank has said.But Bundesbank chief Axel Weber told the BBC that the eventual phasing out of stimulus measures would see unemployment rise and consumption fall. “It does not endanger the recovery but it makes it more protracted,” he said. The car scrappage scheme and workers being put on fewer hours have helped keep German jobless levels steady. Along with France, Germany emerged from recession after its GDP grew by 0.3% between April and June. “Recovery will be protracted and relatively muted but relatively positive,” Mr Weber said. “All we are talking about is recovery from a low level.” Bank bonusesAt the G20 meeting in Pittsburgh this week, world leaders will discuss when and how government stimulus packages should be withdrawn. Mr Weber said that the Europ…

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• 11Sep

  Banks cash in with mortgage price rises

  Mortgages No Comments

  From This is Money:

  It means that for a £150,000 home loan, they are making up to an extra £780 a year on some deals compared with January.

  Meanwhile, the value of funds on the money markets – where banks go to get cash to lend as mortgages – fell to a record low.

  But the biggest gulf is in the cost of tracker mortgages. Banks pay 0.7% for this money, and then lend it to homeowners at 3.84%.

  Ed Stansfield, of researchers Capital Economics, said: ‘There is a desire from lenders to increase their profitability and a desire not to lend.

  The Council of Mortgage Lenders said that a variety of factors influenced the cost of mortgages, not just money market rates.

  Mortgage brokers blamed the high cost of home loans on a lack of competition.

  David Hollingworth, of brokers London & Country, said: ‘There is lots of demand for mortgages but no supply.’…

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• 11Sep

  Halifax: House prices up £6,000 since April

  Mortgages No Comments

  From This is Money:

  House prices are now up £6,000 from the low of £154,490 in April, and are now broadly similar to August 2004.
  Halifax said the three-month average, a less volatile figure than monthly figures, was now up 1.7%.
  The annual decline in prices has moderated sharply from a peak of 17.7% in April. Prices are down 19.5% on the August 2007 peak of £199,612.

  He said: ‘Demand for housing has increased since the start of the year due to better affordability and low interest rates. This, together with low levels of property available for sale, has boosted house prices over the last few months.’

  But Halifax highlighted that Bank of England mortgage figures showing 50,000 approvals for homebuyers in July were 55% lower than the level seen in July 2007.

  David Smith, senior partner at UK property consultancy, Carter Jonas, said: ‘Although transactions are rising and interest in the property market is up, the stabilisation in prices we are seeing sti…

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• 11Sep

  Global recession timeline

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  From The BBC:

  How did the credit crunch at the end of 2007 become a full financial meltdown by the middle of 2008, and finally turn into a global recession? This interactive timeline highlights key dates in the financial collapse and helps you find the original reports of the events as they happened.
  HSBC reveals huge losses at its US mortgage arm Household Finance due to subprime losses, in one of the first signs that the US housing market is turning sour, and that it could have a knock-on effect on the global financial sector.
  New Century Financial, a leading subprime lender, files for bankruptcy. It is the first signal that something is seriously amiss at US mortgage lenders. Shares in other US mortgages banks like Countrywide come under pressure.
  Credit markets go into freefall after Paribas announces that two of its hedge funds are frozen due to “complete evaporation of liquidity” in asset backed security market. European Central Bank injects 170bn euros into the banking market and Fed lower…

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• 10Sep

  Orange broadband hit by outages

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  From The BBC:

  The broadband service run by mobile firm Orange has been hit by an outage.The firm said that it did not know how many people were affected by the problem, the cause of which is still yet to be determined. Orange broadband, previously known as Wanadoo, has nearly one million fixed broadband subscribers around the UK. The firm, which has more than 15 million mobile customers, recently announced that it would merge its UK mobile business with T-Mobile. “We are aware that some UK customers may be experiencing difficulty accessing our internet services at present,” said a spokesperson. “We are investigating the source of the problem as a matter of priority and would like to apologise to those affected for any inconvenience this issue may cause them.”…

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• 10Sep

  Opel and Vauxhall decision looms

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  From The BBC:

  It has been widely reported that General Motors (GM) has chosen the Canadian car parts manufacturer Magna to buy Opel and sister firm Vauxhall.GM is expected to make an announcement later in the day and is understood to have attached conditions to the sale. Earlier, there were rumours that GM could be planning to try to keep control of its European arm. Magna is the German government’s preferred bidder. Any decision will have to be approved by the Opel Trust. It has called its own news conference in Berlin at 1615 (1415 GMT). The German-led Opel Trust has controlled the European operations since GM sought bankruptcy protection in the US. It contains representatives from GM, the German federal government and the German states that contain Opel plants. The rival offer came from the Belgian investment group RHJ. Job newsOpel employs a total of 54,500 workers across Europe, with 25,000 based in Germany.
  Its Vauxhall brand employs 5,500 people in the UK, primarily at its two British plants…

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• 10Sep

  Sportwear chains face fraud probe

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  From The BBC:

  The Serious Fraud Office (SFO) is investigating JJB Sports and Sports Direct International after a referral from the fair trading watchdog.The move comes after JJB said it had blown the whistle on a suspected cartel in the sports retail market. Officials from the OFT visited the Wigan offices of JJB Sports on Thursday. Sports Direct International is controlled by Newcastle United owner Mike Ashley. An SFO spokeswoman said: “The SFO can confirm it is investigating the activities of JJB Sports and Sports Direct International. The investigation is into suspected offences under the Fraud Act and the Enterprise Act.” InvestigationThe SFO said it was investigating on that day that JJB said it had been to the OFT with regards to a suspected cartel. JJB approached the OFT at the end of January, asking for leniency in return for full co-operation with the OFT in any investigation into a suspected cartel, and has worked with the watchdog since. The case involves “suspected agreement or concerted…

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• 10Sep

  Asda creates 10,000 seasonal jobs

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  From The BBC:

  Supermarket chain Asda says it will create an extra 10,000 seasonal jobs for Christmas and the New Year.The additional positions will double Asda’s “seasonal squad”, who work public holidays, to 20,000. The roles are in addition to 7,000 permanent positions the company says it will create by the end of 2009. The supermarket says it has attracted one million new customers in the past 12 months, partly because of the economic downturn. “Biggest Christmas ever”The supermarket is taking on more staff to deal with a larger than average festive rush, according to Andy Clarke, Asda’s chief operating officer. “We’re expecting this to be our biggest Christmas ever, as we are offering more low prices than any other supermarket,” he said. About 70% of the Asda “seasonal squad” is made up of 18 to 24-year-olds. Tesco says it will be creating 6,000 temporary positions, in addition to offering permanent staff extra shifts. Two weeks ago Sainsbury’s said it was recruiting 20,000 seasonal staff, some…

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• 10Sep

  UK interest rates remain on hold

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  From The BBC:

  The Bank of England has held interest rates at the record low of 0.5% for the sixth consecutive month.It has also said it would continue to pump up to £175bn into the economy – so-called quantitative easing – but that it would not extend the programme. Recent data has suggested that the UK has begun to climb out of recession But the Bank has warned recovery would be “slow and protracted” and that it would take months for the full impact of its policies to be felt. ‘Rhetoric and reality’Most commentators said the decision to leave rates, and the approach to quantitative easing, unchanged was sensible. “If you look at survey data, you see the signs of green shoots, but if you look at hard numbers on the real economy, green shoots are much more difficult to see,” said Graeme Leach, Chief Economist at the Institute of Directors business group. “There is a clear divergence at present between the rhetoric and reality of recovery. This situation will change, recovery will come, but just…

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