Infozone Breaking World News

The Office for National Statistics (ONS) has announced that the governments rescue plan for the UK biggest banks could push national debt up by as much as £1.5 trillion. The ONS also said that because the Royal Bank of Scotland and the Lloyds Banking Group are partly controlled by the state, they should be treated as public companies.

The statistics office said it would take time to analyse the damage done to public sector debt, but estimated that in the current climate it could be between £1 trillion and £1.5 trillion, comparable to around 100% of Gross Domestic Product (GDP).

The Office for National Statistics figures also show that public sector net debt reached a record 47.8% of GDP. These figures also showed that the government’s finances worsened in January; typically a strong month when bonuses and corporation tax receipts boost government finances.

BMW has announced that it will be cutting 850 jobs at the Mini factory in Oxford. The giant car manufacturer also confirmed that weekend working has been stopped, with all agency workers that did weekend shifts losing their jobs.

The 850 job losses will affect the Cowley Plant in Oxford, but BMW have also said that it will be cutting 150 jobs at their Mini plant in Swindon. The Cowley Plant will be shut this week, as the demand for cars drops during the recession; the plant will reopen on the 23rd of February, with the new shift changes and job losses taking effect on the 2nd of March.

A statement released by BMW said: “Mini plant Oxford will be bringing in a new shift pattern in response to continuing volatile market conditions,”

And went on to say that, “As of Monday 2 March, the plant will go from a three-shift to a two-shift pattern, operating five days per week instead of the current seven.”

The economic downturn has affected the majority of car manufacturers, with BMW seeing a fall in sales of 4.3% in 2008. BMW is the latest car manufacturer to announce redundancies and factory closures; last month Honda announced in would be closing its Swindon plant for 4 months between February and May.

A classic Bugatti, which had been locked away in a rundown garage for over 48 years, has sold at auction for a staggering €3.4 million (just under £3 million). The Bugatti Type57S Atalante was found by relatives of Newcastle doctor Harold Carr, after he died.

The car was originally built in 1937 and was one of only 17 made. Dr Harold Carr bought the car in 1955 for the hefty sum of £895 and stored it in his garage after the tax disc ran out in 1960, only to be found be relatives in 2007 after he died.

The Bugatti was originally owned by Earl Howe, the first president of the British Racing Drivers Club, before changing hands a couple of time, before Dr Harold Car purchased it.

The auction held by Bonhams Retromobile in Paris, eventually sold the Bugatti, which only had 26,000 miles on the clock for €3.4 million; it is not known who bought it.

Disruptions are set to continue after parts of the UK saw the worst snowfall for 18 years. Southern England was worst hit yesterday, with many delays on the roads and public transport cancellations of both trains and flights.

The snow is now forecast to head north, with the North-East and Scottish borders set to bear the brunt. The Met Office has also issued an ice warning for areas already hit by the storm.

Snow fall up to 8 inches are possible over the next couple of days, with the snow moving up to northern Scotland by Wednesday.

It has been estimated that the disruption caused yesterday in the south will cost the economy in the region of £1.2 billion, as it is thought that around 6.4 million people (20% of the UK workforce) did not go into work yesterday because of the weather.

More than 3,000 schools were also closed yesterday, with a large proportion of them expected to remain closed today.

Honda Motor Company is to close its Swindon base for four months, which will affect 2,500 of the 3,700 strong staff. The closures are due to take affect after today’s shifts are over, with the staff affected receiving full basic pay for two months and around 60% pay for the following two.

The latest closure is in response to the growing downturn affecting the UK car market, and last Friday Honda stated that its Q3 net profit was down 89%. Earlier this week the government outlined a new bailout plan for the stricken UK car industry with a £2.3bn package.

Honda has reiterated that it does not plan to make any redundancies; rather it intends to ‘safeguard employment’ for those workers who want to keep working for the company. It is thought that over a thousand staff have already signed for voluntary severance, with some already leaving the company.

Dave Hodgetts, senior director at the Swindon plant said: “We will be trying to protect their jobs – that’s our priority for the whole period”.

Hackers have stolen millions of jobseekers personal details from the online job recruitment agency Monster. In a statement released by Monster, it said that the internet thief’s has stolen confidential information from its database including login names and passwords, email addresses and telephone numbers.

The agency went on to say that the information taken did not contain any CV’s, personal financial data or national insurance numbers. Customers of Monster are now being urged to change their passwords when they log into the website.

There are nearly 4.5 million people registered users of the Monster.co.uk website, and it is not known how many of them have been affected by the breach. The agency has launched a full investigation into the incident and added ‘corrective measures’ to its website. This latest theft could turn out to be the biggest data loss since the loss of around 25 million child benefit recipients’ data last year.

According to latest figures, UK unemployment rose to 1.92 million during the three month period between September and November 2008. Another 131,000 people joined the unemployment list during this period, which is the highest for 11 years. The figures do not take into account the thousands of job cuts since November.

The figures, which were released by the Office for National Statistics also stated that the number of jobseeker’s allowance claimants rose by nearly 78,000 to around 1.16 million. The report goes on to say that there were 225,000 redundancies between September and November; the highest since figures began in 1995. Jobless rate also rose to 6.1%, compared to 5.2% during the same period in 2007.

 During the Prime Minister’s Questions, Gordon Brown said: “Every job loss, every redundancy, is a matter of regret and sadness for us all,”

And added: “We may not be able to help people keep their existing job, but we will help people get into a new job”.

The government has announced a plan to help small businesses through the economic downturn. The plan will guarantee up to £20 billion of loans given to small businesses and insures banks against small companies defaulting on repayments.

The new plan will consist of a £10 billion Working Capital Scheme, which will help the bank lend to businesses and the government will guarantee 50% of £20bn for short term loans to businesses that have an annual turnover of up to £500 million.

In addition to the Working Capital Scheme, a further £1.3 billion will be made available through an Enterprise Guarantee Scheme for bank loans to businesses with a turnover of up to £25 million.

The government will also be setting up a £75 million Capital for Enterprise Fund, which will aid companies with large debts that have failed to secure other forms of finance.

There are concerns that the new £20 billion plan will not be enough to persuade banks to loan to small businesses, with the Conservatives lobbying for ministers to raise it to £50 billion.

Furniture retailer Land of Leather has become the latest victim of the credit crunch and have called in the administrators. The firm was trying to raise some extra capital in December, but when that failed they were forced to go into administration. The company said that it had cut costs, but current economic conditions were tough and January sales had been ‘disappointing’.

Land of Leather joins a long list of companies that have struggled during the credit crunch, including high profile US bank Lehman Brothers who filed for bankruptcy in September and retailer Woolworths who went into administration in November.

Deloitte have been appointed as administrators and stated that they are, “working closely with the management to protect the interests of customers who have paid deposits on furniture orders.”

And added: “We have taken a number of steps both to protect customers and to inform them of how the administration affects their circumstances.”

Customers who paid their deposit by credit or Visa debit card, or have paid their deposit after December the 26th are protected. Other customers who paid in cash or non-Visa cards before December the 26th will be offered discounts or alternative stock if the original order cannot be met.

Land of Leather, which owns 109 stores in the UK and employs over 850 staff will be open as usual, as Deloitte looks for a buyer.

Here at Infozone we have been looking at ways to generate income while the economy takes a slide:

The current economic climate dictates that we must all be careful with what money we have. This is where Equity Release Plans come into play. Such attractive feature sets for providing money should not be overlooked.

Here are some benefits of Equity Release Plans:

1) Such equity plans can release a great deal of money as a lump sum or as a regular income.

2) People wrongly assume that you must sell or move from a property in order to release the equity.

3) Remember that any money released from your property is tax free

4) Sometimes people who are in need of care use such equity release plans to pay for care bills.

5) Equity release plans can be a great and legal way of migrating inheritance tax.

6) Those who do not have children or family to leave money to often consider such equity release plans as a way of generating extra income.