Bridging Finance News

With government expenses witnessing a speedy increase and tax receipts coming through much weaker, the UK’s public assets clocked well below the expected numbers in January. The arrears in the country’s public sector now stand at 59.5% of the country’s total Gross Domestic Product (GDP).

The chief of the UK trading desk at Travelex, Mark Bolsom admitted that the numbers are pretty ordinary and that they defy the economic reality of Chancellor Darling’s predictions. He termed the chancellor’s estimations as overtly bright, given UK’s cautious economic revival. The steadily increasing unemployment claims also seem to be stopping the tax receipts from being recovered faster.

The numbers, according to Bolsom, might support the theory calling for full-blown spending reductions in the public sector, thus shunting growth. Irrespective of the general election results, Bolsom expects UK to experience a period of economic severity.

News of the poorly performing public sector seems to have hit the Sterling badly, as the currency hit a session minimum. Sterling went down from $1.5620 to $1.5597, when compared to the dollar and from 86.80 pence to 87.05 pence against the euro levels.

The Royal Bank of Scotland (RBS) stands on the brink of declaring a £12 billion loss for last year. Notwithstanding this, the bank’s government appointed Chief Executive, Stephen Hester is expected to receive a £1.6 million bonus. The move conflicts with the prevailing desperation that exists amongst the UK taxpayer community, which has been compelled to bail the UK banking industry out of its present crisis through money market intervention and direct share purchases.

This is not the first instance of the investment banking process choosing a lucrative path, irrespective of the difficulty that seems to be reigning over the conventional banking sector. The present move by the RBS, setting aside a bonus pool exceeding £1 billion in the face of its £12 billion downturn, has baffled many in the UK.

The buzz about possible bonus releases within the RBS has been stated and disputed for a long time now. And now with this latest development, it is estimated that its directors may be asked to sacrifice their privileges for last year, to accommodate the massive bonus package.

The Bank of England’s Monetary Policy Committee (MPC) collectively choosing to abort UK’s asset purchase programme might have generated Utopian trust, caution analysts.

According to Senior analyst at Caxton FX, Duncan Higgins, the MPC was probably worried that any additional extension to quantative easing (QE) could have a damaging effect on the already mounting inflation. Further, the MPC’s decision seemed to tell markets that the Bank might have suspended quantative easing (QE) till future data remains favourable.

Higgins claimed that any disputes supporting further extension of QE would have been extinguished, thanks to the present inflation which stood at 3.5%, much above the Bank’s target of 2%.

The MPC’s decision has had a positive effect on the volume of Britons claiming unemployment assistance. In January, this number had witnessed an alarming increase with 23,500 additional people claiming the benefit. The stable general unemployment rate of 7.8 percent, however, spells consolidation.

Higgins stated that the unacceptable claimant count had led to the pound plunging sharply. He added that the pound had evened out with the euro later and stayed at around 0.2% down against the dollar, off its intra-day lows.

Short term lender and winner of the 2009 Bridging & Commercial Service Excellence award, Masthaven Bridging Finance, has been added to the panel of new bridging finance specialists, London Bridging Finance.

London Bridging Finance is a department of Enness Capital, and specialises in short term and development finance as well as complex lending structures.

Richard Deacon, National Business Development Manager for Masthaven, commented: “Everyone at Masthaven is thrilled to be joining an industry platform that has such exciting growth plans.

“What sets the team at London bridging apart is their dedication to providing an excellent service to their clients. As service excellence award winners ourselves, we fully understand that the relationship between client and service provider is key.”