UK Offers Weak Response to 4-day Riots; Home Repossessions Fall

Arthi Gupta
11 Aug, 2011
New York City

The UK government struggles to offer a unified response to 4-day riots in several cities as fear grips residents. The UK leading index remained flat in June and mortgage repossession declined in the first-half. Irish inflation remained steady in July.

[R]3:30 PM London – The UK government struggles to offer a unified response to 4-day riots in several cities as fear grips residents. The UK leading index remained flat in June and mortgage repossession declined in the first-half. Irish inflation remained steady in July.[/R]

The UK indexes rebounded a day after plunging more than 2% in volatile trading. The indexes recovered after two rating agencies issued a statement indicating that France is not expected to lose its AAA rating.

The market sentiment was also bolstered after commodities prices traded higher. The benchmark FTSE 100 index has as much as 40% weighting in the energy and mining sector.

London, Manchester and Birmingham are under the spell of violence for the fourth day in a row as police struggles to contain riots and government lacks a coordinated approach.

London has steadily lost its appeal to overseas tourists as people fear for their lives in many parts and several areas turned into virtual war zones. The Metropolitan Police, lacking equipment, is out-manoeuvred by disaffected youth as unemployment surges above 25% among 15 to 24 year old.

The UK government established a new £20 million support scheme to help small businesses, homeowners or individuals affected by the recent rioting in London and other cities, Prime Minister David Cameron told the House of Commons on Thursday. Insurers would pay out £200 million in damages.

Reports suggest more than 1,700 arrests have been made in London, the West Midlands and Greater Manchester since the unrest began.

In London, FTSE 100 Index gained 17.70 or 0.23% to 5,026.05 and the pound edged higher to $1.6184.

UK Leading Index Flat

The Conference Board''s leading indicator for the British economy was flat at 104.1 in June.

The Conference Board''s coincident economic index, which measures current economic activity, increased 0.1% in June after remaining unchanged in May.

UK Mortgage Repossession Drops

The number of properties taken into possession by first charge mortgage lenders decreased 7% annually during the first-half of 2011, data from the Council of Mortgage Lenders showed today.

Repossessions declined to 9,000 in the second quarter compared to 9,100 in the first quarter.

Irish Inflation Steady

Irish inflation, as measured by the consumer price index, remained stable at 2.7% in July for a second consecutive month, data released by the Central Statistics Office showed.

Daimler, Rolls Royce Raise Stake in Tognum

Daimler AG and Rolls-Royce Group plc reached a milestone in their takeover of Tognum AG by increasing their ownership to 95%.

The two companies acquired an additional 0.83% of Tognum AG''s equity in a tender offer through their joint venture, Engine Holding GmbH.

With the acquisition of Tognum, Daimler and Rolls-Royce plan to create a supplier of complete systems for industrial engines.

Gainers & Losers

Anglo Pacific Plc surged 5.41% to 271 pence after the natural resources royalties company reported second quarter profit declined 28% to £5.84 million or 5.37 pence per share compared to £8.11 million or 7.50 pence per share in the year earlier quarter.

Avanti Communications soared 5.61% to 314.75 pence after the satellite operator secured a contract with Spain-based Novasoft. The contract provides Avanti with an estimated 1 million potential customers.

Aviva Plc gained 0.12% to 328.80 pence after the insurance company announced the sale of Aviva Investors Australia Ltd to nabInvest, National Australia Bank''s direct asset management business.

Grainger Plc rose 0.40% to 100.20 pence after the holding company stated that in the four-month period to July 31 a further £79.5 million of residential sales was completed taking total sales in the ten months to July 31 to £148.7 million.

Premier Foods Plc climbed 4.98% to 13.70 pence after the food company confirmed the appointment of Michael Clarke as Chief Executive.