Are we half way through the tunnel yet?

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Are we half way through the tunnel yet?

Picture the scene. Alistair and Gordon driving a car through a tunnel. And it is a pretty big car. It needs to be, because it has the entire population of the British Isles in the back. Around 65 million people.

And they are all asking the same question. Not asking for too much. Not "are we there yet ?" but even " Are we half way through the tunnel yet?"

Yet Alistair and Gordon canot provide an answer, possibly because they are in the dark themselves. However, for the poor and long suffering UK public a glimmer of light was handed down this week by Spencer Dale, chief economist at the Bank of England. According to Dale, the British economy is liable to begin a period of cautious growth by the end of 2009, which will continue throughout next year. The upturn will be spurred, he prophesisies by considerable cuts in interest rates, lower commodity prices, falls in sterling value and reforms in the UK banking system.

However, till these glory days arrive, things continue to look grim, with the largest budget deficit for February being posted, and Government tax income down 10 percent for 2008, according to recent figures.

In order to buy more time, the Government is being forced to increase their borrowing levels for 2009, taking them way above the levels of the rest of the G20 group of advanced and fast-growing economies, on a per capita level.

The UK national debt is expected to go beyond £1,000,000,000,000 (one trillion) level in 2009.

Understandably as the UK continues to borrow money to keep afloat, the average family saw their personal wealth decrease by 17% in 2008, the highest decline for at least 40 years, as well as the biggest on record in cash terms.

On a bleak note, yet in keeping with the times, is the news that the British International Motor Show, regarded as the UK's largest consumer exhibition, is to be cancelled at least for 2010. Organisers of the event, the Society of Motor Manufacturers and Traders, announced that the economic downturn "had made it impossible for exhibitors to commit to a 2010 event"., making it the first time the event has been called off since World War Two.

In the city, shock of the day was that the chief executive of the Prudential Insurance group, Mark Tucker is to step down from the role

Tucker, who has been in charge of the company since 2005, is be replaced by Tidjane Thiam the current financial director.

The Prudential. U.K.’s second- biggest insurer, saw their shares rise in value by as much as gained as much as 21 percent( 51.25 pence to 303 pence) in London trading.

The First Group Plc also gained ground in the U.K. market, rising 12 percent (25 pence to 234)

The West African mining group. Randgold Resources Ltd rose a whopping twelve percent (357 pence to 3,357) after they announced that precious metals for immediate deliver advance in price by as much 2.9 percent yesterday.

Europe’s second-largest travel company, Thomas Cook Group Plc) also climbed 7.2 percent (16.5 pence 244.5) on reports that their sales had grown considerably in the last four weeks, with the company enjoying increases of five percent in holiday prices

At the close of day's trading, the FTSE 100 had added 0.31 percent (11.94 points to 3,816.93.) The FTSE 250 index rose by 1.13% or 69.92 points to 6261.62

Sterling fell slightly against the dollar and the Euro and rose slightly against the Japanese Yen and the Swiss Franc:

Pound/US dollar 1.4434
Pound/Euro 1.0583
Pound/Japanese Yen 136.71
Pound/Swiss Franc 1.6229

On Wall Street shares took a tumble after a week of progress.

Dow Jones	7400.8	-85.78
Nasdaq	1483.48	-7.74

The Dow Jones Average dropped 85.78. to close at 7400.8. Nasdaq also fell. 7.74 points to 1483.48

The U.S. dollar looked to be heading for its largest weekly fall in almost quarter of a century amid concerns that it is tottering on the brink of losing its status as the world's reserve currency.

Platinum although still 50% off last year's record price of $2,308 an ounce, has recovered considerably since crashing to a near five-year low of under $800 an ounce in the autumn of 2008, now standing at over the $1,100 an ounce mark. As investors have fled to safety in recent months, the holdings of platinum exchange-traded funds (ETFs) have risen sharply.

Displaying their negative opinion on bonus bashers in no uncertain fashion, lawmakers voted decisively to impose a 90 percent tax on millions of dollars in employee bonuses, brought to light by the by troubled insurance giant AIG scandal but common practice in other companies who have also enjoyed being bailed out. President Obama whole heartedly signaled his support for the concept after similar legislation has been introduced in the Senate.