UK Without Fundamentals While Treasury Does Not Aid Lloyds Bank Further

Daily Forex Fundamentals | Written by ecPulse.com | Oct 15 09 11:49 GMT |

The worldwide banking system has been suffering from the worst financial crisis since the early 1930's and this is all a result of the subprime mortgage crisis that spilled over from the United States and into major economies therefore while causing serious recessions around the globe. Today in the United Kingdom we see that the Treasury did not provide more capital to Lloyds Banking Group Plc. as the bank was seeking 5 billion pounds yet the Treasury is focusing on the Asset Protection Scheme in which Lloyds would pay a fee to the government as they secure it. The government has been working on ways to free banks balance sheets from toxic assets which will help them stabilize therefore when banks find strong ground, more funds will be provided to businesses and consumers which means more investments and spending to be noticed. The more spending and investments there is, the quicker the UK will take to step out of their worst recession since World War II. The credit crisis is a major obstacle that continues to choke on the recovery in the nation while already there are high unemployment rates leading a fragile labour market. In other news today, the Centre for Economics & Business Research Ltd. stated that insurers, financial institutions and assets managers in London might lay off nearly 18,000 jobs this year while it was projected in April that 29,000 jobs will be terminated. The job sector so far is not recovering as Britons continue to become jobless while companies are not seeking employees due to the cut back in production output as a result of the crippled consumer demand. In the economic cycle, one thing affects the other as it has not been functioning accurately in Briton as lower demand leads to lower spending which means falling sales causing production to also cripple while more firings will be witnessed in the economy as companies try to reduce expenses as much as possible. With a broken economic cycle means growth will remain sluggish as the nation contracted by 0.6 percent in the second quarter from the severe first quarter contraction of 2.4 percent, the worst since 1958. The annualized contraction of 5.5 percent was the worst since 1955. Officials are already working around the clock to jolt the nation out of recession which is why the government is doing everything they can to stabilize banks while the central bank is buying gilts to provide tranquility in the financial markets therefore would help ease the economic downturn. The stimulus plan has been successful so far into restoring growth in the nation yet as a result of the mentioned obstacles; the nation is struggling to prosper fully. The UK stock market is currently steady in trading as Xstrata Plc fell after they took back the bid offered for Anglo American Plc while insurance company stocks are rising. As of 11:23 GMT the FTSE-100 index gained a slight 0.23 points to 5,256.33 points. Ecpulse disclaimer: The content of ecPulse.com and any page in the website contain information for investors/traders and is not a recommendation to buy or sell currencies, stocks, gold, silver & energies, nor an offer to buy or sell currencies, stocks, gold, silver & energies. The information provided reflects the writers' opinions that deemed reliable but is not guaranteed as to accuracy or completeness. ecPulse is not liable for any losses or damages, monetary or otherwise that result. I recommend that anyone trades currencies, stocks, gold, silver & energies should do so with caution and consult with a broker before doing so. Prior performance may not be indicative of future performance. Currencies, stocks gold, silver &energies presented should be considered speculative with a high degree of volatility and risk