Latest jobless numbers provided further optimism, with
the number of weekly claims falling to a five-month low last
week.Economists described both sets of figures as "quite promising
news", prompting investors to push Wall Street up over 140 points at
one point, before it settled down to close up 33 points at 9,233.
However, president George W Bush said the economy was
still not growing fast enough.The Commerce Department reported a 3.3%
bounce in consumer spending between April and June, up from 2% in the
first quarter.Business investment leapt to 6.9% from a negative 4.4%
previously."It just reinforces the optimism about a second-half
pick-up," said James Glassman, a senior economist at JP Morgan Chase.
"Consumer spending is quite strong and this is an
interesting contrast with what people saw on consumer
confidence."Latest consumer confidence figures released earlier
showed an expected slump in July, which economists had put down to
concerns about rising unemployment.
A White House spokesman also cautioned that while the
latest GDP figures were "another positive sign that our economy is
continuing to pick up steam," there was still a long way to go.
AGRICULTURAL TRADE CLASH AT SUMMIT
Trade ministers from 25 countries have clashed over
agricultural subsidies during a three-day meeting in Montreal ahead of the
world trade summit in September.
Brazil has threatened to block attempts by the world's
two largest trading blocs, the EU and the US, to bar complaints over their
huge subsidies to farmers in the World Trade Organisation (WTO).
The two trade blocs have had a "peace clause"
in effect until the end of the year as tense negotiations continue over
how to cut the support given by rich nations to their agricultural sector
support which many developing countries believe undermines their efforts
to improve their economies through trade.Now Brazil, one of the world's
biggest agricultural exporters, has objected to a proposal to extend the
"We have paid a very high price for that clause,
and developing countries will not approve its extension," said Gilman
Vienna Rodrigues, who represents Brazil's farmersBrazil was speaking for
the Cairns group of agricultural exporting nations, which include
Argentina, South Africa, Australia, and Canada, the host of the meeting.
The Montreal meeting is being seen as the last-ditch
attempt to reach agreement before ministers from all 146 WTO members meet
in Cancun, Mexico to try and finalise a world trade deal that will benefit
developing countries.The trade talks were launched in Doha, Qatar, in
Last week, several hundred anti-poverty protesters
gathered outside the conference venue which was protected by riot
police.Police said they arrested at least 100 demonstrators after shop
windows were broken.
Some protesters attacked branches of the Gap clothing
firm and Burger King fast food chain, two of the international brands
activists accuse of exploiting workers in poor countries and driving local
producers out of business through unfair trade.
ECB SET TO BACK TRICHET
The European Central Bank (ECB) kept eurozone interest
rates on hold at its meeting last week, its last before its summer break.
And while economists are near-unanimous in their
expectations on interest rates, the focus of attention will be on the
ECB's likely approval of Jean-Claude Trichet as its next president.
The choice of Mr Trichet, made as far back as 1998, has
been highly controversial owing to three years of involvement in a
high-profile corruption case in France.
Mr Trichet was cleared of any wrongdoing in June, and
was subsequently endorsed by a string of eurozone governments.
UK MISSES GROWTH FORECASTS
The UK economy grew by less than expected in the second
quarter of 2003, official figures have shown.The Office for National
Statistics said that gross domestic product rose by 0.3 % between April
and June, and was up 1.8% on the year.The figure was below analysts'
expectations of 0.4%, and wrong-footed predictions of a resurgence on the
back of recent strong retail sales figures.
The economy's sluggish growth will come as a blow to
Chancellor Gordon Brown, who had predicted growth of between 2.0% and 2.5%
for the full year in his most recent budget.With just 0.1% growth in the
first quarter of 2002, GDP is now weaker in the first half of 2003 than it
was in the first six months of 2002, when it grew by 1.9%.
AFRICA ECONOMY SET FOR REBOUND
The African economy is set for a rebound in 2003 after
a weak performance last year, according to the latest report from the UN
Economic Commission for Africa (ECA).However, the report also warned of a
number of risks to Africa's prospects, including the current unrest in
Liberia and Zimbabwe, and the threat of flooding in various parts of the
continent.The ECA forecast average growth of 4.2% in 2003, against 3.2% in
2002 and 4.3% in 2001.
Last year only five of Africa's 53 countries achieved
key targets or Millennium Development Goals on poverty, agreed in a United
Nations declaration in September 2000.A slower than expected recovery in
world trade, drought, the Aids epidemic and war, were all blamed for
Africa's weak performance in 2002.
US WIDENS FREE-TRADE DEALS
Singapore and Chile have become the first Asian and
first South American nations to gain free trade relationships with the
US.The US Senate's backing for the two free-trade deals follows the
approval of the bills in the House of Representatives last week.
Such agreements free trade in most goods and services,
set up a conflict resolution mechanism and provide for the protection of
intellectual property.Canada, Mexico, Jordan and Israel already have
similar deals with the US.Once Congress sends the bill back to the White
House, President Bush has 10 days to sign the legislation.
The agreements, which are due to come into effect on 1
January next year, are the first to be negotiated by the Bush
administration using special trading powers — the so-called Trade
MUGABE TARGETS FARM GREED
Zimbabwe's President Robert Mugabe is reported to have
ordered senior ruling party officials to conform to his "one man, one
farm" policy under his land reform programme.The state-controlled
Herald newspaper reported that he wanted any extra farms to be
relinquished within two weeks.
The controversial land reform programme has seen most
of Zimbabwe's 4,500 white farmers evicted from their land, but farm
productivity has also declined rapidly.Aid agencies say this has
contributed to food shortages leaving several million Zimbabweans in need
of food aid.
TURKEY CLAN LOSES TO MOTOROLA
A United States judge has ordered a controversial
Turkish business dynasty to pay more than $4bn to the mobile phone giant
Motorola.The judge found that the Uzan family had defrauded the company
through what he called an almost endless series of lies.Motorola and its
rival Nokia accused the Uzans of spending $3bn they lent them for
expansion of Telsim, the Turkish wireless carrier, on yachts, New York
property and other luxuries.
EXXON PROFITS SOAR
Profits at Exxon Mobil, the world's biggest oil
company, have more than doubled — boosted by higher gas and oil
prices.The group said that in the last three months profits had jumped to
$4.17bn (£2.61bn) from $2.64bn in the same period last year.
FRANCE SHAKES UP STATE GIANTS
The French government, which has promised big reforms
to stimulate the country's economy, has started to shake up some of its
biggest state companies.The government has adopted a bill which will allow
the state share in France Telecom to drop below 50%, a move that paves the
way for its full privatisation.
The move comes the day after the finance ministry
challenged Electricite de France (EDF) and Gaz de France (GDF), the
country's titanic energy firms, to draw up ambitious plans to develop
their businesses in a deregulated environment.
Forcing firms like EDF towards greater independence is
a central plank in European Union policy, which has long been suspicious
of the favouritism shown to France's corporate champions.
SLACK EU ECONOMY 'MUST REFORM'
The eurozone economy is recovering slowly and
uncertainly, the Organisation for Economic Cooperation and Development (OECD)
has warned.And governments must take tough action if they expect sustained
growth.After a "subdued" 2003, the region could expect modest
growth of up to 2% next year, the OECD forecast in a report on the
And even this cautious recovery faced a multitude of
challenges notably a slower-than-expected rebound in key trading partners
such as the United States.To help guard against this sort of unpredictable
risk, the OECD recommended Europe accelerate the deregulation of its
WEAK US DOLLAR HITS RIO TINTO
The world's second-largest mining group, Rio Tinto, has
blamed the weak US dollar for a 9% fall in net profit during the first six
months of this year to $641m (£398m).
The Anglo-Australian miner is affected by movements in
the US currency because most of its products are sold in dollars while the
cost of mining its ores is denominated in Australian or Canadian dollars,
or South African rand.
TRADE TALKS STILL HAVE 'WAY TO GO'
Trade talks in Montreal have ended with optimistic
noises from ministers about the prospects for a make-or-break meeting in
the Mexican city of Cancun in six weeks' time.But behind the upbeat
rhetoric, the industrialised countries — the US, the European Union,
Japan and Australia — have barely shifted from the positions which have
frozen negotiations for 18 months.Hopes that the ministers' meeting could
free up the roadblock on agricultural subsidies and market access, key
issues for developing countries, seem to have been dashed.
IMF URGES ARGENTINE REFORM
The International Monetary Fund (IMF) has approved the
final tranche in a $3bn (£1.8bn) aid package, but warned that more
structural reforms were still necessary.
IMF managing director Horst Koehler said Argentina had
comfortably met its fiscal and monetary targets.Now, he said, the
government needed to make progress on reforms to the tax system, as well
as improvements to ailing banks and public utilities.
MORE JOBS AT LAST FOR JAPAN
The number of people out of work in Japan dipped in
June for the first time in three months, sparking a glimmer of hope about
the prospects for its ravaged economy.At the same time, household spending
accelerated faster than at any time in 20 years.
The figures will come as welcome relief for Prime
Minister Junichiro Koizumi, who later this year is facing both reselection
as head of the ruling Liberal Democratic Party and a probably general
election.But relief was tempered by stubbornly weak retail sales, falling
in June for the 27th month in a row.
LOSSES BATTER BRUISED BA
British Airways has revealed the recent staff dispute
over clocking-on has cost it between £30m and £40m ($49m-65m).
TOSHIBA DOUBLES LOSSES
Japan's biggest computer chip maker, Toshiba, said its
losses in the April to June period doubled compared to a year ago.Toshiba
posted a net loss of 36.8bn yen ($307.5m; £189m) for the period, up from
a loss of 18.8bn yen in the same three months of 2002.
DR CONGO GETS $10BN DEBT RELIEF
The Democratic Republic of the Congo is in line for
debt relief worth as much as $10bn (£6.2bn) after the International
Monetary Fund and World Bank gave their blessing to economic
reforms."In recognition of the authorities' satisfactory progress in
implementing sound macroeconomic and structural policies, the DRC's total
external debt... is to be reduced by up to 80%," the two said in a
HISTORIC LOSS FOR SINGAPORE AIRLINES
The airline posted a loss of S$312m ($177.5m, £110.9m)
in the three months to June, compared to a profit of S$478 in the same
three months a year earlier.
SLIMMER PROFITS FOR UNILEVER
consumer goods group Unilever has posted a 7% fall in first half profits
to £1.5bn ($2.4bn).