groups together the world's 30 leading economies,
"the recession that began in March 2001 was among the mildest on
record." An OECD report forecast economic growth this
year of 2.4% and of 2.7% in 2003.
While these figures are well below the average of
the later 1990s, they compare with a 0.3% trough recorded in 2001.
The organisation warned, however, that the Federal
Reserve should be ready to cut interest rates yet further if the
recovery flags — although the longer-term trend was towards higher
The OECD's optimism is in contrast to the
prevailing view that any recovery will be slow and fragile.
Predictions that the US would bounce back quickly
after a sharp economic dip at the end of last year have proved
unfounded, and recent data has been at best mixed.
But the OECD said that growth was being driven by
"remarkable" productivity gains advances in technology that have made
it possible to squeeze more output from the same amount of economic
It also praised US consumers, whose willingness to
spend had not seriously faltered, and argued that management of
interest rates had been "skilful".
CHINESE ECONOMIC GROWTH MARCHES ON
China's economy grew 7.9% in the first nine months
of 2002, thanks to strong international demand for its products and
heavy government spending.
Figures from the National Bureau of Statistics (NBS)
indicated that Asia's second largest economy would beat its 7% target
for the whole year as exports surged 19.4% in the period.
"The national economy has maintained fast and
healthy growth and momentum and the overall situation is better than
expected," the bureau said.
The data comes ahead of next month's Communist
Party Congress, at which China's leadership, including President Jiang
Zemin are expected to hand over power to a new generation.
Government spending helped push growth to 8.1%
year-on-year in the July to September quarter alone.
"The state policies of expanding domestic demand
and market demand have become the two major driving forces of economic
development," an NBS spokesman said.
Infrastructure investment — on roads, property and
power grids — rose 21.8% in the nine months to September from last
The government hopes the fiscal stimulus will
create jobs and lay the building blocks for further economic growth.
The evolving private sector has been absorbing
unemployed former public sector workers and China could attract $55bn
in foreign direct investment this year, the NBS said.
Stalking the Chinese economy is deflation, with
consumer prices falling 0.8% over the nine months, which can hurt
company profits and lead to lower investment.
The lower prices helped retail sales up 8.7% in the
period, but were not enough to help them reach the government target
ROW OVER 'STUPID' EU BUDGET RULES
The system under which Brussels regulates EU member
states' budgets is at the centre of a growing row, after the president
of the European Commission called it "stupid".
Romano Prodi told Le Monde newspaper that the EU
needed rules to keep individual countries from running up huge
deficits and undermining investor confidence in the euro.
But he added that current rules were "rigid".
Mr Prodi's remarks, which have been played down by
the commission, come at a time when Europe's budgets are under almost
The German government admitted for the first time
that it would probably breach EU budget guidelines this year, and
France, Italy and Portugal are believed to be in a similar position.
Politicians around Europe have for years called for
amendments to the so-called "stability and growth pact" budget rules,
but Brussels has resisted change.
ASIAN STOCKS CELEBRATE MICROSOFT GAINS
Stock market across Asia skipped upwards after
Microsoft, the world's largest software firm, outstripped expectations
for third quarter profits.
Microsoft's news that it had outperformed profits
estimates by 16% came on the same day as other strong performances in
the technology sector, such as that of mobile phone maker Nokia.
The Nikkei closed up 1.4% at 9,086 points having
risen 2% earlier in the session.
In Korea, the Kospi index jumped 4.05% to 670.79,
its strongest close since 24 September.
In Taiwan, the Taiex closed up 4.1% at 4,458 points
and stocks in flat screen makers and phone key pad makers rose,
including suppliers to Nokia.
In Hong Kong, the benchmark Hang Seng was 1.4%
higher at midday local time. Shares also closed higher in Sydney.
BANK GOVERNOR HINTS AT RATE CUT
Bank of England governor Sir Edward George has
hinted that interest rates might need to be cut to protect the economy
from the effects of falling stock markets.
In a speech to business leaders in Manchester he
said there had been a "nervous breakdown" in the international
He said this was due in part to fears of
international terrorism, high profile corporate collapses in the US
and concerns about the impact of a war on Iraq.
Sir Edward said that as a result the Bank's
Monetary Policy Committee (MPC) — which sets interest rates — would
have to consider whether to cut rates to inject fresh confidence into
OPTIMISM LIFTS WORLD MARKETS
Wall Street was boosted by a strong earnings update
from technology giant IBM, and a government report of a lift in
European markets also welcomed news of robust
profits from mobile phone group Nokia, which forecast a steady end to
On Wall Street, the Dow Jones index of leading US
shares closed up 235 points or almost 3% at 8,271.
The German Dax index closed over 5% higher at 3,172
while the French Cac index ended up 3.7% at 3,183.
In the UK, insurance group Prudential helped the
leading FTSE 100 index continue its rally, closing up 113 points at
ANGOLA'S 'MISSING MILLIONS'
An internal report by the International Monetary
Fund (IMF) has found that nearly $1bn disappeared from Angolan
Government finances last year.
The sum is far greater than the value of
humanitarian assistance sent to the country this year and the report
adds that over the past five years a total of over $4bn are
PROFITS SOAR AT SAMSUNG
Samsung Electronics, the world's biggest
manufacturer of memory chips, has posted a jump of almost 400% in net
profits for July, August and September.
SUN CUTS 11% OF WORKFORCE
Computer maker Sun Microsystems has announced
another round of job losses, after failing to make a profit in the
last three months. The US group said it would cut around 11% of its
workforce, its second major cut in its workforce in just over a year.
STRIKE SET TO CHOKE ITALY
Italy is bracing itself for a general strike which
looks set to cause major havoc with transport.
The second general strike in six months follows a
series of smaller protests held throughout this week, including a
march by workers at the troubled car maker, Fiat, in Rome.
INDONESIA'S TOURISM 'TOTALLY DAMAGED'
A top Indonesian tourism official has said the
country's travel industry could be "totally damaged" if the police
fail soon to catch those responsible for the Bali bombing.
At least 200 people, mostly holiday makers, died
when a car bomb exploded outside a nightclub on the island of Bali.
About one third of all tourists top Indonesia go to
Bali, making it "the soul of tourism" in the country, said Setyanto
Santosa, chairman of the Indonesian Tourist Board.
Bali receives 1.7 million tourists a year, or 35%
of the 5.2 million people who holiday in Indonesia, Mr Santosa told.
US COMPANIES WEATHER THE STORM
A string of results from US technology companies
have met expectations and compounded suggestions that the worst of the
gloomy corporate news could be over.
Online auction group ebay confidantly predicted it
could sustain its strong growth rate into next year, while Nortel, the
Canadian telecom equipment maker, said it expects to break even by the
middle of 2003.
There was less optimism from technology groups
Siebel and Gateway, which both posted losses for the last three months
amid ongoing struggles in the sector.
PRIVATE FINANCE SPENDING TO FALL
The government's reliance on private finance for
funding the building of public hospitals, roads and schools is set to
The value of projects commissioned under the
controversial private finance initiative (PFI) will drop from £3.5bn
this year to £2.9bn by 2005/6, Geoffrey Spence, head of the Treasury's
Private Finance Unit, said.
'BLACK HOLE HUNTER' TELESCOPE LAUNCHED
A Russian space rocket has blasted off from a base
in Kazakhstan carrying a powerful new telescope into orbit to observe
some of the Universe's most violent events.
The Integral gamma-ray observatory — described as
Europe's "black hole hunter" blasted off from Baikonur
It will focus in on the exotic: not just black
holes but supernovae, neutron stars, pulsars and so called gamma-ray
bursters as well.
ENRON AUDITOR FINED $500,000
Arthur Andersen, the accountancy firm at the centre
of the Enron accounting scandal, has been sentenced to five years
probation and given a $500,000 (£322,000) fine.
GERMAN INSURER WINS CHINA DEAL
Giant German insurer Allianz has won permission to
set up an asset management joint venture in China, becoming the first
foreign firm to be allowed to operate in the sector, said its partner,
Guotai Junan Securities.
Allianz will own 33% of the business, which has
been given the go-ahead by the China Securities Regulatory Commission
China is in the midst of opening up its banking,
stock broking, insurance and fund management industries to foreign
firms as part of its commitments as a member of the World Trade
Allianz is to own the maximum permitted share of
the business, while its partner, Guotai Junan Securities will hold the
GERMANY ADMITS BUDGET FAILURE
German Finance Minister Hans Eichel has admitted
for the first time that Germany's budget is likely to fall short of EU
standards this year. EU member states are obliged to keep their budget
deficit to below 3% of economic output.
Only a few weeks ago, Germany said its deficit
would meet the desired target. But the cost of clearing up after the
floods, and the weakening German economy have taken their toll on
The European Commission said that if Germany did
overshoot the limits it would have to start disciplinary action.
Granada and Carlton have agreed a £2.6bn ($4bn)
UK UNEMPLOYMENT FALLS
Unemployment in the UK has fallen for the third
month in a row, and wage growth has slowed down.
The number of claimants of unemployment benefit
edged 200 lower to 946,000 — 3.1% of the workforce — the Office for
National Statistics (ONS) said.
BRUSSELS PROBES FRENCH POWER AID
The European Commission has launched an
investigation into potentially anti-competitive state aid given to
Electricite de France (EdF).
The state-owned energy company, which owns London
Electricity in the UK, has received low interest rates on loans backed
by the French government, giving it a competitive advantage in the
The Commission said it would propose that the
French government remove EdF's unlimited state guarantee, a facility
that allows the firm better access to finance than its private-sector
TOP DEMOCRAT BLASTS BUSH ON ECONOMY
One of the US' leading Democratic lawmakers has
proposed an $200bn (£130bn) economic revitalisation programme in a
challenge to Bush administration policies.
Hoping to draw on the growing unease among
Americans with the economy, the House Minority Leader Richard Gephardt
proposed new spending and tax cuts as a way to spur the fledgling US
Members of Mr Gephardt's Democratic party have been
harshly critical of Republican George W Bush's economic policies and
advisors, saying they have done more harm than good.
BRAZIL LIFTS INTEREST RATES TO 21%
Brazil's Central Bank has raised interest rates by
three percentage points to prop up the weakening currency and halt
After a special meeting of the bank's governing
council, it lifted rates to 21% but gave no indication of future
INFLATION SPARKS SOUTH AFRICAN RATE FEAR
Latest inflation figures for South Africa have led
to fears that the government could raise interest rates again, the
fifth rise this year.
Food prices are still leading the increase in
prices, hitting the poorer population hardest.
The consumer price index rose by 11.8% in
September, its highest rate of growth for 10 years, and up from 10.8%
EUROPE BANS NON-GREEK FETA CHEESE
The European Commission has decided that only
cheese made in Greece can now be sold under the name of feta.
The decision is a victory for Greece, where feta
cheese is believed to have been produced for about 6,000 years.
It is a blow to Denmark, France and Germany — the source of much
cheese sold as feta in European supermarkets.