Is the UK in recession?
October 13, 2008
The latest British Chambers of Commerce Quarterly Economic Survey reports that the UK economy is under immense pressure, it is already in recession and the situation is getting worse. The survey was based on 5000 responses from businesses of all sizes, the BCC called its findings “alarming”, with sales and orders moving deeper into negative territory for both manufacturing and services.
Read more
Why did Lehman Brothers file for bankruptcy?
September 24, 2008
An Invesco Perpetual perspective
John Greenwood, Invesco Chief Economist, gave the following comment in response to the news:
“At its core the Lehman-Merrill Lynch-AIG financial crisis is about balance sheets. On the way up the credit bubble helped to inflate the values of houses and commercial real estate and mortgage-backed securities based on them, as well as the values sof risky equities, high-yielding currencies and finally commodities. As long as asset prices were rising, investment banks, mortgage finance companies and hedge funds were only too happy to borrow more and more to fund such acquisitions. Rising asset prices fostered illusions of balance sheet strength.
“Now as the credit bubble bursts the positive feedback loop that strengthened asset values and investors’ equity in the boom years has gone into reverse. Two types of investors have been, and will be hit hardest: (1) those holding substantial amounts of assets in the previously targeted risky, high return areas such as real estate, high-yield currencies and commodities, and (2) those firms, funds, or individuals that are most heavily leveraged. Investment banks like Lehman Brothers and Merrill Lynch were at the forefront of the balance sheet boom, but now their assets have gone bad, and lenders have been unwilling to roll over their loans. Lehman’s large holdings of real estate and mortgage backed securities, combined with their massive leverage has destroyed its business”.
Points and views of the current economic climate.
September 23, 2008
Central banks have not been implementing enough “tough love” to try to cure their economies’ woes, particularly in light of the credit crunch. Read more
Lloyds TSB secures the future of HBOS
September 22, 2008
The FSA has backed UK retail bank HBOS following the announcement of its £12bn merger with rival bank Lloyds TSB. The acquisition of HBOS will create one of the biggest retail banks in the UK. “The announcement of the proposed merger with Lloyds TSB is a welcome move, as it is likely to enhance stability within financial markets and improve confidence among customers and investors in the UK financial sector.” According to a spokesman for the regulator, which has been working with all major UK banks to ensure they had “credible capital and liquidity plans”. Read more
European markets predicted to rise
September 22, 2008
A survey conducted by Lazard Asset Management found that 63% of investment managers expect European ex UK to rise over the next 12 months. The survey of investment managers at the joint Investment Conference in Istanbul also found that 98% thought European markets would rise over the next three years. Aaron Barnfather, manager of the Lazard European Alpha fund, said there was “still value to be found in quality stocks and sectors and reason for optimism in this asset class”.
AXA isn’t doing too bad
August 13, 2008
Axa UK & Ireland announced that underlying earnings increased from £160m in the first half of 2007 to £183m in the first half of 2008 which equates to a 14% increase. Even though these results show a healthy increase, the company said it expected to make 500 redundancies in support services and other divisions as part of an ongoing restructuring.
How Much Money Do I Need?
July 2, 2008
Well the Joseph Rowntree Foundation (JRF) has produced a report that the average Briton needs at least £13,400 annual income.
The report took 2 years to produce and the £13,400 is not just the amount needed for survival but is based on how much an average person would need to survive and participate in society, have the opportunities and chances to capitalize upon in life. (This would include a one-week self catering holiday in the UK.)
Wages growth and the effect on inflation
July 1, 2008
AXA Investment Management have warned that there are signs that Mervyn King and Alistair Darling’s efforts to keep wage growth under control are being thwarted. Warnings at the beginning of June from the governor of the Bank of England and the chancellor of the Exchequer warned organisations to be wary of meeting calls for higher wages in the face of increasingly concerning inflation figures. Read more
PM Gordon Brown close to bottom of the league!
June 30, 2008
Gordon Brown has become very close to being in the bottom five prime ministers for stock market returns in his first year as a leader since David Lloyd took on the role in 1916. Since he took over, the LSE has dropped by 15.4% excluding dividends, Fidelity exposed. This was only slightly worse than the first years under Margaret Thatcher, Neville Chamberlain, Winston Churchill - twice - and Mr Lloyd George. Read more
Debt increases 20% for pensioners
June 24, 2008
Britain has witnessed a 20% increase in the average secured debt for those in, or nearing retirement, according to the latest figures from Key Retirement Solutions. Britons over age 60 now have the highest debt levels of any demographic. The average single pensioner has mortgage outgoings of £218pm; those aged over 70 seem to be most vulnerable, with average mortgage debt as high as £45,493. 250,000 pensioners are destined to join the 2.25m struggling with fuel poverty by the end of the year according to the poll.