London, United Kingdom (AHN) – The Bank of England will inject an additional $117.7 billion into the economy in an attempt to encourage commercial bank lending and stimulate sagging growth.

That decision was reached by the Bank of England’s Monetary Policy Committee when it met and voted on Thursday.

The move boosts the amount of the bank’s asset purchase program, financed by issuance of central bank reserves, to $431.7 billion, bank officials said.

Businesses in the United Kingdom welcomed the move.

In a statement, the bank’s Monetary Policy Committee explained why it acted.

“The pace of global expansion has slackened, especially in the United Kingdom’s main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy threaten the UK recovery.”

“In the United Kingdom, the path of output has been affected by a number of temporary factors, but the available indicators suggest that the underlying rate of growth has also moderated. The squeeze on households’ real incomes and the fiscal consolidation are likely to continue to weigh on domestic spending, while the strains in bank funding markets may also inhibit the availability of credit to consumers and businesses.”

“While the stimulatory monetary stance and the present level of sterling should help to support demand, the weaker outlook for, and the increased downside risks to, output growth mean that the margin of slack in the economy is likely to be greater and more persistent than previously expected.

“CPI inflation rose to 4.5 percent in August. The present elevated rate of inflation primarily reflects the increase in the standard rate of VAT in January and the impact of higher energy and import prices. Inflation is likely to rise to above 5 percent in the next month or so, boosted by already announced increases in utility prices,” the committee added.

“But measures of domestically generated inflation remain contained and inflation is likely to fall back sharply next year as the influence of the factors temporarily raising inflation diminishes and downward pressure from unemployment and spare capacity persists,” the committee explained.

“The deterioration in the outlook has made it more likely that inflation will undershoot the 2 percent target in the medium term. In the light of that shift in the balance of risks, and in order to keep inflation on track to meet the target over the medium term, the Committee judged that it was necessary to inject further monetary stimulus into the economy.”

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London, England, United Kingdom (AHN) – The international banking regulator, the Bank for International Settlements (BIS), urged over the weekend the Bank of England to raise the country’s record-low interest rates.

The regulator warned that financial stability of Britain is at risk unless the country’s central bank imposes tighter monetary policy.

Although the BIS, in its yearly report released on Sunday, made the same warning to central banks around the world, it singled out the Bank of England because Britain’s inflation rate had exceeded the BOE’s 2 percent target since December 2009.

The BIS pointed out that the United Kingdom’s consumer price index has reached 4.5 percent, while the country’s key lending rate continues to be at 0.5 percent since March 2009.

The BIS stressed that the BOE’s extremely accommodative policies threaten to embed high inflation in the system and damage prospects for long-term growth. It also places at risk financial stability because the very low rates encourage risk-taking in the financial sector.

The BIS said central banks must be prepared to hike key lending rates at a faster pace than previous monetary tightening episodes.

The BOE favors low rates because the recent rise in commodity prices was a one-time incident and there is enough slack in the economy to keep wage pressures down. But the BIS disagrees with the bank’s assumptions.

The BIS said there is still a threat of second-round effects because higher food prices could cause higher salaries in emerging markets, which in turn, could cause an increase if the global supply chain.

Despite inflation rate in England hitting 4.5 percent in April, and economists expectation of a key lending rate increase within the year, the Bank of England’s monetary policy committee has not yet indicated an interest rate hike is underway soon.

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City of Newport, Wales, United Kingdom (AHN Sports) – Alex Noren hoisted the hardware Sunday at Celtic Manor. He used his day-long consistency for a one-under par 70 and a nine-under par total of 275 that delivered victory at the Wales Open.

Noren won his second European Tour event with 15 pars, two birdies and only one mistake in the final round.

At the driveable par four 15th, his three-wood carried the water hazard but hit the bank and bounced back into the water. He still had a great shot at par but missed from eight feet and picked up his only bogey of the day.

He cruised to victory after opening up a four-shot lead over the first seven holes. Neither Anders Hansen nor Peter Hanson could make a run at him. Hansen shot an even par 71 and tied for second at seven-under par 277 with Gregory Bourdy of France who shot the day’s low round, a 67 that pulled him up into second place with Hansen.

Pablo Larazabal and Ricardo Gonzalez equalled Bourdy’s effort with their own 67s and finished with Johan Edfors (69) and Hanson (72) at six-under par, 278.

Defending champion Graeme McDowell recovered from his disastrous third round 81 with an even par 71 to finish at three-over par, 287.

“I’ve proved to myself that I could hit a lot of greens and not just relay on my short game,” Noren said after his win. His last victory came two years ago.

He won’t have time to rest on his latest laurels. He’ll go to Sunningdale and play in a 36-hole qualifier for the Open Championship in July. He qualified last week for a spot in the U.S. Open.

“It will be wierd but I’ll will look forward to it,” the new champion said.

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London, United Kingdom (AHN) – People in the United Kingdom are not saving enough for retirement through an employer-sponsored or private pension, according to several surveys.

A survey done by HSBC of 17,000 people in 17 countries found that only 39 percent of people in the UK have a financial plan to save for their retirement compared to up to 84 percent of people in Malaysia.

While another survey of 4,177 UK employees by the National Association of Pension Funds and YouGov found that 49 percent of workers in the UK had savings for retirement through pension at their workplace or a private pension plan.

The latter survey also found that 34 percent are relying on a state pension, 21 percent say they plan to put money into an individual savings account and 17 percent say they plan to invest in real estate as a way to fund their retirement.

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Washington, DC, United States (AHN) – The U.S. State Department on Tuesday barred seven firms from trading with the U.S. because they supplied oil to Iran in violation of 1996 sanctions against the Islamic country.

Sanctioned were Venezuela’s state oil company, Petróleos de Venezuela, Ofer Brothers Group of Israel, Petrochemical Commercial Company International (PCCI) of the United Kingdom, Royal Oyster Group and Speedy Ship of the United Arab Emirates, Tanker Pacific of Singapore and Associated Shipbroking of Monaco.

Petroleos was found to have delivered $50 million worth of petroleum products to Iran between December 2010 and March this year.

Under the sanctions, the firms cannot bid for government contracts, obtain export licenses, and obtain export-import financing.

The department also sanctioned more than 15 people and companies in China, Iran, North Korea, Syria and elsewhere for illicitly trading in missile technology and weapons of mass destruction. They were banned from vying for U.S. government contracts and from buying and selling U.S. defense articles.

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London, United Kingdom (AHN) – Just a day after Iceland rejected a referendum on repayment plan, the British and Dutch governments have decided to take the Nordic country to the court to recover their $578,000,000, which was lost when Icelandic savings bank Icesave collapsed.

The British and Dutch governments had asked their depositors to bail out the money to Iceland, however, the collapse prompted them to demand their money back. Only 40.9% votes were in favor and 59.1% were against it.

Responding to the vote, the British government said that Iceland’s vote disappointed them, while the Dutch government said that this ended the time for negotiations.

Danny Alexander, UK’s Chief Secretary to the Treasury said that they would take Iceland to the international court.

Speaking on the Andrew Marr program, Alexander said, “It’s obviously disappointing… We tried to get a negotiated settlement. “We have an obligation to get that money back, and we will continue to pursue that until we do… We have a difficult financial position as a country and this money would help,” Alexander added.

Dutch Finance Minister Jan Kees de Jager said that his government would discuss what actions should be taken with Britain, adding that the European Free Trade Association Surveillance Authority would finally resolve this matter.

“I am very disappointed that the Icesave agreement did not get through. This is not good for Iceland, nor for the Netherlands. The time for negotiations is over. Iceland remains obliged to repay. The issue is now for the courts to decide,” De Jager said in a statement.

Meanwhile, Iceland’s Finance Minister Steingrimur Sigfusson said that it would take at least 12 months to resolve this matter in the court. Talking to the BBS, Sigfusson said that the bankrupt bank is still able to pay out 90% of the British and Dutch claims. Iceland’s Prime Minister Johanna Sigurdardottir said that the rejection of the plan had divided the country.

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Dublin, Ireland, United Kingdom (AHN) – News that the Bank of Ireland would be able to meet its capital requirements and not need a government takeover caused an investor rally that saw shares rise by more than 36 percent.

Bank of Ireland’s share of increased capital requirements comes to $7.4 billion and means the government can keep its stake in the bank below 50 percent. The Irish Republic government currently owns a 36 percent stake in Bank of Ireland.

It also means that senior bondholders avoid taking any losses for now.

Bank of Ireland officials said they would seek the additional money through capital-management initiatives.

The jump in Bank of Ireland share prices came the day after stress tests on the Irish banking system revealed that the combined total of additional capital that all the nation’s banks needed was an extra $33.95 billion to survive the financial crisis.

However, shares of two other Irish banks tumbled.

Allied Irish Banks PLC dropped 15 percent while Irish Life and Permanent Group plunged 53 percent. Irish Life and Permanent needs to raise $5.66 billion in capital. While Allied Irish is already majority owned by the government, which is expected to further increase its stake.

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London, United Kingdom (AHN) – A commemorative mug made to celebrate the Royal wedding of Prince William and Kate Middleton has a major slight flaw – it features the wrong prince.

Alongside Kate Middleton, is her future brother-in-law Prince Harry.

On the back, an inscription reads: “The fairytale romantic union of all the centuries. 29th April 2011.”

It remains unknown if it is a mistake, a deliberate spoof or a marketing person’s clever way to stand out from the pack of wedding knickknacks.

The mug, was reportedly designed by Chinese firm Guandong Enterprises. “Crafted in the finest bone china, it features an exquisite design of the happy couple with ornate gold detailing to honor this great moment in history,” the company says on its website.

“Please be our guests to own this esteemed, limited edition heirloom to celebrate with your work associates, friends, family and loved ones on 29th April 2011.”

It further states in small print states the firm’s products “are not supplied to, or approved by, Prince William of Wales, Catherine Middleton or any member of the Royal Family.”

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London, Britain, United Kingdom (AHN) – Tight finances will continue to squeeze people in Britain, causing more families to struggle to pay debts, according to the Consumer Credit Counseling Service.

Charity CCCS issued the dire forecast in its Statistical Yearbook for 2010 based on an analysis of 470,000 households with debt.

Most people coming to the agency for help managing debt say they are having problems because of a loss of income or rising prices, or a combination of the two.

Homeowners with unsecured debt faced more problems than renters did, CCCS found.

Increases in prices meant that families with children needed more money to meet expenses.

The average age of people who sought advice from the CCCS was 42.

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London, Engand, United Kingdom (AHN Sports) – The Bahrain Grand Prix has been contested in Formula One the last six years but that doesn’t mean F1 is going to make the country pay for canceling the event earlier this week.

Because events beyond Bahrain’s control forced the cancellation of the GP, F1 will not inflict cancellation fees on the country.

Continued political unrest in the Gulf nation scrapped the scheduled March 13 race, but F1 will not make Bahrain pay an estimated $40 million rights fee to the Formula One Management company.

The fees will not be enforced because the event’s cancellation was due to events beyond the organizers’ control. It was unforeseen or the equivalent of a natural disaster.

There is still the chance the event could be rescheduled for after the planned season finale.

F1 hopes to squeeze the race into the calendar at the end of the year, but instead of the F1 season opening in Bahrain it will open on March 27 in Australia.

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