What a week! The utility-dominated FTSE 100 celebrated the fifth anniversary of the crash of 2008 with a 2 per cent gain to close at 1,950, its biggest five-day surge since early 2009.
The excitement followed indications from Oleg Deripaska, executive chairman of BP, that the Russo-British energy group might resume dividends next year, breaking away from the pack of UK-listed blue-chips that have been husbanding cash since demand for their goods and services slumped and recession began four years ago.
Britain's co-premier David Cameron - one half of the country's "Double-Dave" unity government with David Miliband - hailed BP's tentative announcement as another sign that "the great heart of British capitalism is still beating".
There were also hopeful signs on what used to be known as "the High Street". From his bunker in Monaco, Lord Green, whose retail empire now embraces the web brands House of Fraser, Currys and Marks and Spencer, said he was optimistic that last week's cut in the Bank of England base rate to 0.2 per cent would help wean people from the prevalent mend-and-make-do mentality. However, he cautioned that if October temperatures stayed above 25 degrees, it was bound to have an impact on sales of winter clothing.
Optimism about a resumption of dividends offset further poor economic news as the number of people out of work in September topped 5.2m.
There was also bad news from the banking sector. The government again delayed the sale of its 90 per cent stake in Royal Bank of Scotland. The Treasury's advisers, Goldman Hathaway and Mitsubishi Stanley, warned that it would be imprudent to reprivatise the bank at a time when investors and depositors were still nervous about a listed private-sector model for retail banking. RBS's absorption of Barclays in 2010, after the latter's demerger of investment bank Diamond Inc, created a new Big Three of British banks, each competing to be the safest. RBS is up against super-mutual Nationwide-Abbey and Chinese-controlled HongKong Standard Chartered (HSCB), which trades under the singing Black Horse pictogram.
Sir Robert Peston, who took over as governor of the Bank of England earlier this year following its long-heralded absorption of the Financial Services Authority, welcomed the government's decision to delay privatisation again. "Speculation, encouraged by irresponsible media coverage, has got out of control," he said, reminding journalists of their duties under the 2011 Dangerous Blogs Act.
Sir Robert also lifted the ban on short-selling of financial stocks, getting a muted but positive reception from the few Mayfair-based hedge funds that have not yet decamped to Dubai, Shanghai and Zug.
In line with its expensive "velvet-glove" strategy, outlined by Lord Turner in 2008, the regulator has expanded relentlessly in recent years. To accommodate staff it has bought or leased many of the vacant office blocks in the City and Canary Wharf, providing some hope that the moribund commercial property sector will return to break even within five years.
In other news, EasyBrit, the state-controlled airline, announced an increase in passenger numbers for September. Lord Stelios of London Luton, transport minister, said the indefinite closure of the Channel Tunnel - a security measure imposed after the cross-border dispute with France over mark-to-market accounting turned nasty - had obviously helped. He also promised EasyBrit would take Heathrow's third runway out of mothballs to run charter flights to Iceland for the key Premiership clash tomorrow between Reykjavik's Chelsea and Beijing-based Manchester United.
The excitement around the match is a reminder of how the Arctic island has cemented its Russia-backed recovery from the 2008 crisis by luring London's super-rich - including Chelsea owner Roman Abramovich - with tax breaks. Meanwhile, Sir Boris Johnson, London's mayor, said he would maintain his Ring of Steel around the Olympic village. The draconian security measures have been in place since last year's Games, which brought a record medal tally for the British team after the US pulled out because of security fears. The country's sporting heroes are still confined to the Village because of prolonged riots between Sir Boris's elite police and a group of unpaid building contractors, bankrupt Dockland buy-to-let landlords, and the terrorist wing of the militant Pensioners' Rights Brigade.
Finally, Gordon Brown, presiding over his third annual meeting of the International World Bank Fund, has alerted the world to a coming financial cataclysm.
It is the 10th such early warning issued since the former British prime minister became president of the New Bretton Woods institution. Like the others, it is likely to be ignored by Britain.
andrew.hill@ft.com To comment, visit www.ft.com/lombard
