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Public sector job cuts begin to grow
In the short term, it looks the like the shrinking UK jobs market will still be around, but with a significant twist in the tail. The much hammered private sector will still lead the way both in terms of redundancies as well as lack of new employment opportunities; however the public sector is beginning to feel a similar pinch. A recent report from the Chartered Institute of Personnel and Development predicted that redundancies for the current quarter are showing that redundancies in local governments are likely to increase for the first time since the recession reared its ugly head
Monthly unemployment figures due to be released this week are liable to confirm that joblessness in the UK is slowly creeping up.
Vernalis, the UK based pharmaceutical developer, deserve a pat on the back, having dramatically reversed considerable losses made in 2007, to an almost break even situation in 2008. The turnaround was largely gained by a combination of reorganization as well as the settling of loans, especially one outstanding from Endo Pharmaceuticals, a US drug company.
Revenue at Vernalis, has increased from £19.8 million to £54.8 million after Endo repaid an outstanding £44.6million loan In addition, Vernalis succeeded in reducing their research and development cost by around £6 million to £27.4 million.
Despite that fact, Vernalis still made a loss, although slight less than fifty thousand pounds, a drop in the ocean when compared to 2007, when losses were reported of over £45 million.
HSBC expect to put the icing on the cake of the first quarter banking results by announcing "record levels" of income and profits, mostly earned from outside the UK. Although trading conditions in the US also remains difficult, HSBC are offsetting losses made there as well as in the UK, by profits (expected to be over $11billion pre-tax) in Asia.
Britain’s third-largest bank plans Barclays Plc announced that they will be laying off around 700 staff in 2009, mostly from their information technology division. On the day, their stock rose 2.1 percent (6 pence to 287). BT Group Plc, U.K.’s largest telephone company announced that they are liable to double their annual pension contributions by up to 560 million pounds annually. The market did not like the idea and their shares dropped to 93.5 pence.
To prove that there are still some smokers around , the Imperial Tobacco Group Plc's shares 2.6 percent (42 pence, to 1,632) in anticipation of positive first quarter results.
Hotels and leisure are faring less well as the Intercontinental Hotels Group Plc, owners of the Holiday Inn chain, saw their stock values drop by 0.8 percent (5.5 pence to 658.5) in anticipation of less than encouraging first quarter results due today.
It was not a good day for the FTSE, with the 100 Index falling 26.59 points to 4,435.50. The FTSE250 closed on 7,610.17.
The pound weakened against the dollar rebounding from a four-month low on Monday.
- Pound/Japanese Yen 148.75
Wall Street shares had a bad day on trading The Dow Jones Average dropped 155.88 to close at 8418.77, while the Nasdaq did slightly better falling only 7.76 points to reach 1731.24
For US car giant General Motors, calling for Chapter 11 protection seems like an inevitably, with the government extending their deadline till the 1st June to announce their restructuring program. Among the steps that GM apparently intend to take is to close more than a third of their US dealerships in an effort to reduce debt, which is currently around thirty billion pounds
Not doing so hot either is Nissan, the Japanese carmaker who reported a net loss for the 2008, but nowhere near the levels of their American counterparts. Their net loss was around £1.59bn (233.7bn yen) Sales of new cars worldwide from Nissan in 2008 were around 3.4 million vehicles, down 9.5% from 2007, with the US market accounting for the highest percentage.
In commodities yesterday, gold slipped 0.3 per cent to $913.15 an ounce, with crude oil averaging around $57.75 a barrel. Copper slipped back for the second day at $209.35
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