Week ended 27 September 2008 – Another week of financial turmoil

Posted by admin on 28 September, 2008 under Weekly business news summary | Be the First to Comment

This week has seen more turmoil on the financial markets and stress in the banking sector on both sides of the Atlantic!

Whilst the US government is battling to win over Congress to pass the $700 billion bank bail-out the UK Government is nationalising banks on this side of the Atlantic. Just this weekend a deal has been thrashed out with the Bradford & Bingley and the UK Government to secure its future. Whilst over in the US the biggest bank so far, The Washington Mutual to fail and be taken over by regulators as a result of the sub-prime lending fiasco!

With many economies moving closer or into recession, like The Republic of Ireland is now officially in recession and we have Japan now with a trade deficit!

In the UK the economy needs lower interest rates, but this is looking doubtful for HSBC customers where they are looking to raise interest rates due to a shortage of money. However, the World banks are putting yet more money into the banking sector, with the Bank of England lending an extra £30 Billion.

The problems are being reflected in the retail sector with Marks & spencer seeing a turn in their fortunes for the first time in a while and JJB sports has posted a £9.7 million loss for the first six months of the year – “blaming the “worst retail recession” it has ever known”. With the business Ted Baker also in problems and at a point of calling in receivers, the economy is not looking too healthy.

All this is at a time when the present government see it fit to fight amoungst themselves over their leadership, whilst world economies are going into economic meltdown – it is a worry where this is all going to end!

But there is good news for low paid workers! The National minimum wage has been increased by the Government – great for business owers, just what they need when things are tough already – lets add more problems and increased costs.

End of the week saw:
Stock exchanges:
FTSE 100: 5,088
DOW: 11,143
S&P: 1,213
Nikkei: 11,893

Currencies
UK Sterling £ to US Dollar $ 1.83301
UK Sterling £ to Euro € 1.25915
UK Sterling £ to Aus $ 2.20458
US Dollar $ to Euro € 0.68769