Week ended 7 February 2009 – Lowest UK interest rates ever!
Posted by admin on 8 February, 2009 under Weekly business news summary | 
2 Comments to Read
Top of the news this week is a new all time low UK base-rate of 1%
As the UK economy continues to stagnate and struggle the Bank of England has reduced the interest rates yet again. However, there was some good news on the home front as the Halifax reported a rise in house prices of 1.9% in January 2009.
Also in the UK we are seeing some major arguments erupting between the Government and those banks where the Government owns a major stake. The Royal Bank of Scotland (RBS), for example, is talking about paying £1 billion in bonuses. There is outrage because these employees would not have jobs right now if it were not for the Government bail-out investment, so they should not be receiving any bonus. Gordon Brown is pushing to make sure that the banks only pay bonuses based upon long-term future success. THE RBS is 70%owned by the UK Government.
Adding to this row is the Lloyds Banking Group, in which the Government owns 43%. The Board are preparing to pay bonuses, but they are prepared to accept share-based rewards for the last financial year instead of cash. This same period, for which this bonus will be based, has seen Lloyds share price fall by 75%! The Lloyds Bank bonuses are to be determined by the bank’s chairman of their remuneration committee, Wolfgang Berndt.
Eric Daniels, the Lloyds chief executive, is entitled to a maximum bonus of 225% of his basic salary of £960,000, whereas his fellow directors have an entitlement of up to 200% of their salaries.
There are continuing reports of job losses this week as we Sharp, the Electronics giant of Japan announce 1,500 job cuts and the US “out of jobs” per cent increased to 7.6% in January 2009, up slightly from 7.2% in December 2008. Growing unemployment in the US might help the new US President Barack Obama defend his economic stimulus plan of $900 billion (£608 billion), as he urges US Congress to approve this package quickly.
End of the week saw:
Stock exchanges:
FTSE 100: 4,292
DOW: 8,281
S&P: 868.60
Nikkei: 8,077
Currencies
UK Sterling £ to US Dollar $ 1.47899
UK Sterling £ to Euro € 1.14018
UK Sterling £ to Japanese Yen 135.816
UK Sterling £ to Aus $ 2.19312
US Dollar $ to Euro € 0.771545
US Dollar $ to Japanese Yen 91.7797
Commodities
Nymex Crude oil – $40.17
Gold – $914.30
lewis said,
when will world economic become better?
admin said,
That is a good question Lewis, in my opinion we might start to see things improving in 2010, however, we need people to start believing this so that the snow ball that is currently running down the hill picking up negative thoughts and comments on its way needs to start climbing up the other side with lots of positive engergy and thoughts! All you see in the news is negative comment after negative comment so it is not wonder that every one is feeling bad. There is no doubt that things are difficult out there, but people need to start talking thngs up again and going out buying again to create money circulation. The banks also need to pull their finger out too and begin lending again to small and large businesses!
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