We start the news this week with what on the face of it seems like a Wallace & Gromit story line "The wrong bank account". JP Morgan managed to put as much as £16bn of customers' funds into their own account and not their clients. The Financial Service Authority on Thursday sent out a major warning to tighten up the way they look after their clients' money as the investment bank received the largest fine the regulator has ever handed down JP Morgan was fined £33.3m by the FSA for what it described as "serious breach" of rules governing the segregation of the bank's money and that of its clients. Though no money was lost, the misallocation of the funds would have meant JP Morgan's clients would have lost their money if the bank had collapsed. Lets hope they got the right cheque book out when paying the regulator's bill.

With all the press stories flying around 2 years ago about Northern Rock, a piece of surprising news hit the headlines, The bad bit has made a profit! The old mortgage portfolio that was separated from Northern Rock's core business at the start of this year is back in profit after falling loan impairments and lower costs have boosted its performance. The business has recovered more quickly than the group's core deposit-rich banking division, which is being constrained by low interest rates. Northern Rock yesterday revealed that its asset management business - which comprises most of its £50bn existing mortgage book along with unsecured loans, its government loan and other debt - recorded an underlying pre-tax profit in the first four months of this year.

Rising food bills have driven Britain's inflation rate to the highest in the Western World. The UK's Consumer Price Index (CPI) figure of 3.per cent is two or three time higher than similar economies across Europe and beyond. New figures from the Organisation for Economic Co-operation and Development (OECD) suggest British families are suffering far more than counterparts across the globe. The 3.per cent figure compares to just 1per cent in Germany, 1.1per cent in the Netherlands, 1.5per cent in Italy and Spain, 1.7per cent in France, 1.8per cent in Belgium. The figure has actually fallen by 2.1per cent in the past year in Ireland and by 1.2per cent in Japan. This has led the new Prime Minister to state that inflation was starting to worry him. "We have seen a slightly worrying increase in inflation in recent months, so interest rates will be set to control inflation". The Prime Minister remembered that he did not control interest rates so then went on to say "policy is set independently by the Bank of England" but this has been seen by many across the country as a veiled warning that the Bank should be wary of allowing prices to rise much further.

In a separate report, borrowers have been warned that mortgage costs could soar over the next two years even if the bank rate remains on hold, pushing up repayments by as much as £3,000 a year on a £200,000 home loan. The alert comes as the best five-year fixed-rate loan fell below 4% last week for the first time since May 2009. Credit Suisse predicted last week that lenders will increase profit margins on mortgages by 1.5 percentage points to 2.5% above the cost of funding over the next two years. Banks could seek to do this by raising standard variable rates for existing customers and raising margins on loans for new borrowers, Credit Suisse said.

For the first time more people are beginning home ownership as singletons than as married couples, according to research. As house prices have risen and marriage rates fallen, the tradition of a young married couple buying their first home together shortly after their wedding has finally ended. According to research undertaken Santander, over the last five years 37 per cent of first time buyers were singletons and 29 per cent of people bought with their spouse.

And finally, the statement that has been "I can't start work until I have had my first cup of coffee" has been found wanting. Scientists found the so-called “caffeine high” is just a reaction to the body craving the drug. The research found that coffee lovers were no more awake than those who did not drink caffeine in the morning. In fact, the study of 379 people showed, regular coffee drinkers needed a hit of caffeine to bring them up to the same level of alertness as non-coffee drinkers. Prof Peter Rogers, from the University of Bristol's Department of Experimental Psychology, which led the study, said: "Our study shows that we don't gain an advantage from consuming caffeine. The study that had to be published online in the journal Neuropsychopharmacology, a name that is just too long for printed versions, found there was "little difference" in the results between the coffee users and those who were given placebos. Prof Rogers added: "On the other hand, while caffeine can increase anxiety, tolerance means that for most caffeine consumers this effect is negligible." We have yet to see the impact of this research on the share price of Starbucks and Costa.

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