UK inflation may surpass 3 percent

A recent survey by Bloomberg News has revealed that the median of 39 forecasts indicated that inflation is likely to reach 3.2 percent which will be the highest rate since 1997.

As a result of this trend, analysts are signalling that Bank of England Governor, Mervyn King, may have to write to the Chancellor to explain the situation and why interest rates may not be enough to fend off inflation and avoid a recession.

According to the forecasts from the Confederation of British Industry, the economy is heading for its worst performance since 1992 and the battle Mervyn King faces fighting off record food and fuel prices and the faltering economy, simply cannot be ignored.

The Monetary Policy Committee has acknowledged the fact that the above-target inflation could create a high medium-term inflation expectation, as well as future inflationary pressures.

This has affected consumer confidence, as well as having political implications as support for Prime Minister Gordon Brown’s Labour government, is at its lowest ebb since polling began in 1943.

In a recent poll by YouGov Plc, 73 percent of people surveyed said that their financial position will worsen over the course of the year.

BHP leads miners higher as metals prices gain

Gains in metals prices once again helped equities markets in the Asia-Pacific region higher Wednesday.

In Australia, BHP Billiton (ASX: BHP; LSE: BLT; NYSE: BHP; JSE: BIBLT) rose to a two-week high and led other miners higher, while in China refiners saw gains.

Banks in the region were down on the session but shippers saw gains on the possibility that recent declines in shipping rates will reverse.

The main exception to the gains came in India, where the Sensex dropped 1.75 percent to 15,422.31; otherwise, the Taiex added 0.19 percent to 8,217.58, the Straits Times Index was up 0.39 percent to 3,040.09, the Hang Seng was 1.16 percent higher to 23,325.8, South Korea’s Kospi index gained 1.34 percent to 1,774.13, and the Shanghai Composite jumped 5.24 percent to 2,941.12.

In Australia, the S&P/ASX200 was 0.38 percent higher to 5,443.2 while the Sydney Ordinaries added 0.44 percent to 5,550.3.

Tokyo’s markets were also higher on the session, with the Nikkei 225 adding 0.73 percent to 14,452.82 while the Topix index was up 0.55 percent to 1,409.64 and the Mothers market gained 0.69 percent to 621.78.

The real estate sector saw gains, with Mitsubishi Estate (TYO: 8802) heading to a two-week high, while the semiconductors sector rose after NEC Electronics (TYO: 6701; NAS: NIPNY) received a “buy” recommendation, up from “neutral”, from Goldman Sachs (NYSE: GS).

Carmakers saw gains while insurers were the day’s biggest losers in Tokyo.

European equities declined on the session.

The FTSE Eurofirst 300 was down 1.47 percent to 1,250.2, with Frankfurt’s Dax falling 0.99 percent to 6,728.91 as the Paris CAC-40 was 1.44 percent lower to 4,618.75 and the IBEX dropped 1.97 percent to 12,631.5.

There were only six gainers on the CAC-40 and four on the Dax, mostly in the utilities sector, while banks, the semiconductors sector, and steel makers were lower and carmakers were mixed.

In London, the FTSE 100 fell 1.79 percent to 5,756.9 while the FTSE 250 dropped 1.94 percent to 9,534.8.

The oil sector was down on declined in oil prices, led by Royal Dutch Shell (LSE: RDSA, RDSB; NYSE: RDS.A, RDS.B) and BP (LSE: BP; NYSE: BP; TYO: 5051; TSX: BP.U), while the real estate sector was down on a downgrade for the entire sector from Credit Suisse (SWX: CSGN; NYSE: CS).

Banks and supermarkets were also lower, while gainers included medical device manufacturers and the pharmaceutical sector.

New York equities markets were lower in mid-afternoon trade, with the Dow Jones Industrial average down 1 percent to 12,038.99 at just past 2 p.m.

At the same time, the Nasdaq Composite had dropped 1.08 percent to 2,431.18 and the S&P 500 was 0.94 percent lower to 1,338.2.

Investment banks declined after Morgan Stanley (NYSE: MS) reported that earnings were down 57 percent in the most recent quarter and on investor comments in Monaco that there are more write downs to come related to the credit crisis.

Carmakers and railroads saw declines, while the parcel delivery sector was lower after FedEx (NYSE: FDX) reported a loss in its fiscal 4th quarter.

Jaguar Land Rover announces 600 new jobs

Jaguar Land Rover has announced it is to create 600 jobs with the majority to be based at its development centre in Warwickshire.

The news follows the £700 million investment a few weeks ago when the brands were bought by India’s top vehicle maker, Tata Motors for £1.2 million.

The recruitment drive is designed to attract engineers to develop new technology aimed at reducing vehicle emissions.

Furthermore, Jaguar Land Rover is introducing a graduate programme for over 80 graduates who will join the business in the autumn.

The graduates will be involved in a number of activities and events over their 2-year development period, while at the same time integrating themselves into their chosen department.

Commenting on the recruitment drive, newly-appointed CEO David Smith, said the new jobs demonstrate Jaguar Land Rover’s confidence in our future.

The company is entering an exciting era with new models and ambitious technologies. This is a great time to be a part of the British car industry and is an exciting time for Jaguar Land Rover, added Mr Smith.

Jaguar Land Rover’s HR Director, Des Thurlby, added that the company has a bright future and is a very attractive place to work for the best in our industry here in the UK.

The company has locations at Solihull and Castle Bromwich in the West Midlands, Whitley in Coventry, Gaydon in Warwickshire and Halewood in Merseyside.