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The eurozone's debt crisis poses the biggest single threat to UK financial stability, the Bank of England's new financial watchdog has warned.

Despite the limited direct exposure of UK banks to debt in beleaguered countries such as Greece, the impact on nations such as Germany and France would have a knock-on effect and lead to a tightening of bank funding conditions.

The minutes of the first meeting of the interim Financial Policy Committee set out a number of risks to the stability of the UK financial system, saying: "Sovereign and banking sector strains in some vulnerable euro-area economies were the most material and immediate threat to UK financial stability."

Among recommendations, banks will be told to retain more of their profits as they face threats from the eurozone debt crisis and the possibility that homeowners may not be able to repay their mortgages. It said in the medium-term banks face a potential problem from the number of businesses and homeowners that are struggling to repay their loans or mortgages and warned that banks may have made inadequate provision for bad debts.

The committee, which has been set up to oversee the country's financial stability in the wake of the credit crunch, advised banks to hoard more money during the good times to prepare them for any shocks ahead. Members discussed possible measures to limit dividends paid to shareholders or to rule that they are paid in newly created shares rather than cash to help banks build their capital reserves.

 

 

 

The success of an internet company has combined with a drop in oil prices to send the US stock market higher.

Shares of social networking company LinkedIn jumped 109% to 94.25 US dollars on the first day they began trading on the New York Stock Exchange.

The debut is seen as a preview of other social networking sites that are expected to start trading during the next year. The list of candidates includes the online messaging service Twitter, game maker Zynga, and the biggest social network of all, Facebook.

"LinkedIn represents the first opportunity for the average investor to participate in what looks like a lasting, powerful trend of social media," said Lawrence Creatura, a portfolio manager at Federated Investors. "They're frothy with excitement, and that's being imputed into the share price."

LinkedIn finished Thursday with a gigantic price-to-earnings ratio of 554, a valuation reminiscent of internet stocks during the late 1990s technology bubble. By comparison, the average price-to-earnings ratio of tech companies in the S&P 500 index like Apple and Google is 15.

Sumeet Jain, a principal with venture investing firm CMEA Capital, said LinkedIn's IPO suggests that the number of mergers and acquisitions will increase this year as social networking companies grow, a potential boon for the stock market.

 

 

 

 Photo by Spana charity

The Foreign Office has urged all British nationals to leave Syria in the wake of the latest unrest unless they have a pressing need to remain in the country.

In updated travel advice, the Foreign Office said that following the "rapid deterioration" in the security situation Britons should get out while commercial flights were still available.

"Given the situation on the ground, it is highly unlikely that the British Embassy would be able to provide a normal consular service in the event of a further breakdown of law and order and increased violent civil disorder," it said.

"British nationals should therefore plan accordingly."

 

Allies should seek United Nations approval to arm and train Libyan rebels, a former head of the UK armed forces said, as Muammar Gaddafi's forces pounded the city of Misrata with rocket fire.

Lord Dannatt said that while the Nato-led air strikes had enjoyed some success, equipping the opposition to fight effectively was vital to prevent a vacuum forming that could be filled by extremists.

And the ex-chief of the defence staff said the dictator's illegitimacy as leader had been firmly underlined by the apparent use of controversial cluster munitions against residential areas.

Five civilians were killed on Saturday in a 30-minute barrage of shelling in Misrata - the only western city still in rebel hands - that damaged a dairy factory and sent up a column of black smoke.

Frustration has grown among residents of the port, where Gaddafi's troops have stepped up their siege. One doctor hit out at Nato for failing to stop the deadly assault, saying: "We have not seen any protection of civilians. Nato air strikes are not enough and the proof is that there are civilians killed every day here."

The criticism was echoed in rebel stronghold Benghazi, where rebel spokesman Abdel-Hafidh Ghoga said: "There's no more room for hesitation or for not standing with determination against what is happening in Misrata and other Libyan cities, because the destruction that Muammar Gaddafi is causing in Libyan cities is great and extensive."

 

 

Photo by danmags100

British efforts to help Japan are gathering pace as specialist teams begin their work in the country following the devastating earthquake and tsunami.

A search and rescue team organised by the Department for International Development (DfID) has arrived at its base 20km outside Ofunato in the north east, where they are due to join in the international search for survivors at first light.

The group, made up of 63 UK fire service search and rescue specialists, two rescue dogs and a medical support team, are set to work alongside American counterparts and co-ordinate their operation with local teams.

Meanwhile, 12 Britons and two New Zealanders from the International Rescue Corps (IRC) are in place to assist in the humanitarian effort.

photo by British Red Cross

 

The family of a British woman missing after the New Zealand earthquake have spoken of their agonising wait to learn whether she was among the dead.

Susan Selway was in her fourth floor office in the Canterbury Television building, which was struck when tremors tore through the city of Christchurch on the South Island earlier this week.

Ms Selway, a clinical psychologist who celebrated her 50th birthday this month, was working in the building temporarily after her previous office was badly damaged in the last earthquake to hit the area in September.

Her husband, financial adviser Richard Austin, rushed to her workplace after hearing the news and waited all night with his brother David in the hope of seeing her walk out of the building alive.

Meanwhile, her father Malcolm Selway, 72, from Henley-on-Thames in Oxfordshire, had just returned to Britain after a trip to New Zealand but took the first plane back there to look for his daughter.

 

 

US stocks finished with modest gains after the government reported a sharp drop in the unemployment rate. Information technology companies led stocks higher.

The Labour Department said that the unemployment rate dropped to 9% in January, the lowest rate since April 2009. But in a separate survey, the government said 36,000 new jobs were created last month, the fewest in four months.

The Dow Jones industrial average rose 30 points, or 0.2%, to close at 12,092. The S&P 500 index rose 3 points, or 0.3%, to 1,310. The Nasdaq gained 15 points, or 0.6%, to 2,769.

 

 

Britain has called on Egyptian President Hosni Mubarak to "listen urgently" to protesters as pressure for him to quit intensified.

Foreign Secretary William Hague delivered the message after tens of thousands of demonstrators again defied a government curfew to remain on the streets.

More than 50 people are now said to have been killed and thousands injured in five days of clashes between police and crowds demanding economic, social and democratic reform.

Efforts by Mr Mubarak to contain the crisis and prolong his three-decade reign appeared to be having little success. On Saturday evening he appointed former intelligence chief Omar Suleiman as his new deputy, having dismissed his whole cabinet overnight.

But the army seems unwilling to intervene to quell the uprising, and the US and UK - long-standing allies of the president - have refused to back his regime. America is reviewing its multibillion-dollar aid package for Egypt in light of the violence.

Nobel Peace Prize winner Mohamed ElBaradei, a leading opponent of Mr Mubarak, has returned to the country to join the dissidents but is believed to have been put under house arrest.

The Foreign Office has advised Britons against "all but essential" travel to Cairo, Alexandria, Luxor and Suez, while extra diplomatic staff have been flown out to help those stranded. An estimated 30,000 UK nationals are in the country, but the majority are in the relatively safe Red Sea resorts.

 

photo fiannafail

 

Irish Prime Minister Brian Cowen has announced he is standing down as leader of the ruling Fianna Fail party but will remain at the head of the country's government until the March general election.

After more than a week of political turmoil and a string of ministerial resignations, Mr Cowen said the election should be fought on policies not a leadership issue.

"I'm concerned that renewed internal criticism of Fianna Fail is deflecting attention from this important debate," Mr Cowen said.

 

 

Photo by Foreign and Commonwealth Office

Russia has stepped up its spying row with Britain, declaring the expulsion of a diplomat from its London Embassy as groundless and unfriendly.

Foreign Secretary William Hague announced that he had requested the diplomat's removal "in response to clear evidence of activities by the Russian intelligence services against UK interests".

The Kremlin responded with the tit-for-tat expulsion of a member of staff from the UK Embassy in Moscow.

The Russian foreign ministry issued a statement declaring itself the injured party, saying: "The British side took an unfriendly step the other day, having groundlessly declared one of our colleagues in our embassy in London persona non grata. We were forced to take an adequate corresponding measure."

The statement described Britain as the "initiator" of the row and voiced regret that it had come at a time when "encouraging trends" had been developing in Anglo-Russian relations.