However a senior US politician has cast doubt on the
climate change warnings.Organisers of the conference in Milan had hoped to
get final ratification needed to put the 1997 Kyoto Protocol on greenhouse
gas emissions into effect. But in the last few days, Russia — whose
support is vital after the US pulled out of the accord — has said it is
having second thoughts about signing. The conference — into its 10th day
before finishing on December 12 — heard that the effects of climate
change were already being felt.
"Climate change is already having an impact on
mankind, especially in developing countries," said China's chief
delegate Liu Jiang. Mr Toepfer said: "Climate change is not a
prognosis, it is a reality that is and will increasingly bring human
suffering and economic hardship". UN Secretary-General Kofi Annan
spoke of the heightened frequency of extreme weather events in recent
years. ""There is growing concern that this trend is likely to
continue," he said. The conference was shown some of the findings by
insurance firm Munich Re, which has been tracking the cost of global
ASIA'S GROWTH PICKS UP PACE
Asia will remain the fastest growing region of the
world economy in 2003 and 2004, according the Asian Development Bank's (ADB).
The ADB upgraded its regional economic growth forecasts for this year and
next for Asia, excluding Japan. It now expects the region to grow 5.7%
this year, instead of 5.3% predicted in September, and 6.2% instead of
6.1%. It said China's rapid growth, stronger consumer spending and greater
regional trade were behind the increase. "Overall, I am
optimistic...I believe Asia as a region will continue to post the highest
level of growth in the world," said ADB President Tadao Chino.
Asian economies are benefitting from stronger economic
prospects in the United States and Japan, as well as Europe, though the
latter's impact was less marked, the ADB said. Asia's exporters were hit
hard by the US recession in 2001 and subsequent slow recovery. However, US
economic growth is running at roughly 8% for 2003. Japan remains sluggish,
but it too is showing signs of improvement. Economists expect it to grow
at just over 2.5% this year. China's economic boom is helping regional
growth by driving increases in trade between Asian nations, the ADB said.
Strong consumer spending has also helped growth and is playing a greater
role in some South East Asian economies. Spending by shoppers accounted
for more than 50% of Thailand's growth and more than one third of growth
in the Philippines and Indonesia since mid-2002, the ADB said. It also
found "tenative signs" of a pick up in private investment.
FOREIGN INVESTMENT IN JAPAN JUMPS
Foreign investment in Japan has surged during the first
six months of this year, the Finance Ministry has said. Money inflows
jumped 55% to 981bn yen (£5.2bn; $9bn) in the first half, compared with a
year earlier. About two-thirds of the cash was used to buy company shares
amid optimism that economic growth is picking up both at home and abroad.
The US was the top investor, with the financial services and insurance
industries being the most sought after. The influx helped fuel a rally in
the benchmark Nikkei 225 stock index, which added 8% between the end of
December and July.
GERMAN EXPORTS HIT BY EURO SURGE
German exports fell in October as the euro's rise
against the dollar made non-EU exports less competitive. The currency has
recently powered to record highs amid low US interest rates and widening
deficits. Economists have voiced concerns that the euro's strength may
snuff out a recovery in Europe's largest economy. The German government
said earlier this year that its forecast of accelerating growth was
dependent on favourable exchange rates. The drop in exports narrowed
Germany' s trade surplus to 10.8bn euros (£7.6bn; $13.2bn) in October
from 11.5bn euros a year earlier, the statistical office said.
JAPAN OPTIMISM DESPITE GDP CUT
Japan's economy in the three months to end-September
grew more slowly than than previously thought, hit by weak business
spending. Revised gross domestic product (GDP) figures showed that output
expanded by 0.3% during the quarter, half what had earlier been announced.
The news underlines the fragility of recovery from a decade of recession.
But analysts were cheered by figures showing that orders of machinery had
soared in October. The latest GDP figures are the equivalent of an annual
growth rate of 1.4%, sharply down from the initial estimate of 2.2%.
Struggling tour operator MyTravel has announced a huge
loss of £910.9m ($1.5bn) for the year.
DEUTSCHE BANK LOSES KIRCH APPEAL
Deutsche Bank has been ordered by a Munich appeals
court to compensate former German media magnate Leo Kirch. He had accused
Germany's biggest bank of hastening the collapse of his empire , one of
the country's best-known.
US CAMPAIGN FINANCE REFORM UPHELD
The United States Supreme Court has upheld key parts of
a landmark campaign finance law designed to curb the influence of money in
politics. By a 5-4 vote, the court ruled that it was constitutional to ban
unregulated contributions known as "soft money". It also upheld
restrictions on TV and radio "issue ads" by corporations and
unions right before elections. Congress approved the law and President
George W. Bush signed it in 2002, but a number of opponents challenged it.
UK BUDGET SHORTFALL
The Chancellor has admitted that the government budget
deficit will be £10bn larger than he previously thought. He also said
that the economy is on course to grow at 2.1% this year, and 3% to 3.5% in
the next two years. Some predict that taxes will have to rise to meet the
growing budget gap. But Gordon Brown claims to be on target to meet his
own "golden rule," which says the government should not borrow
for current spending over the whole economic cycle.
CHINA'S OUTPUT SURGES IN NOVEMBER
China's industrial output surged last month, driven by
increasing demand for steel, cars and electronic equipment. Factories made
17.9% more goods in November compared with the same month a year earlier,
official figures showed. Computer production led the way, jumping 75%,
with auto output up 33% and steel output 23% higher. Economic reforms, low
wage costs and a massive domestic market have helped turn China into the
world's fastest expanding major economy.
FED LEAVES INTEREST RATES ON HOLD
The Federal Reserve has decided to keep US interest
rates on hold at 1% recently. As expected, they have been left at their
45-year low, despite the recent weakening of the US dollar. Most analysts
believe the low rates are starting to stimulate the US economy, and the
Fed appeared reluctant to rock the boat, with job creation increasing. US
economic growth is currently in excess of 8%, but a modest slowdown is
predicted around the turn of the year, ahead of an increase again in 2004.
UK HOME SUPPLY WAY BELOW DEMAND
Britain is now so short of new houses that an extra
39,000 need to be built each year just to keep up with the UK's population
growth. The Treasury's Barker Review of Housing Supply says the lack of
homes has been a major cause of high UK house prices. It says homeowners
would have saved £8bn if house prices had risen at the rates seen in
continental Europe. For first time buyers, the report says each is paying
an extra £32,000 in comparison to the European average.
AILING DOLLAR FALLS TO RECORD LOW
The dollar has fallen to a record new low against the
euro, before December 9 interest rates decision in the US. In late
trading, one euro bought $1.2241, a new high, as the dollar continued to
be hit by growing US deficits and low interest rates. The dollar also
stayed near an 11-year low against pound sterling, which buys $1.7251, and
it fell to 107.1 yen.
CABLE & WIRELESS REVEALS US EXIT
British telecoms group Cable & Wireless said it is
using US bankruptcy law to exit its business in the country. The group has
agreed to sell Cable & Wireless America (CWA), to Gores Technology
Group for $125m in cash.
SINGAPORE TO START BUDGET AIRLINE
Singapore Airlines is to launch a new budget carrier,
in a partnership that includes the founder of successful Irish low-cost
service Ryanair. The new airline — Tiger Airways — will begin flights
in the second half of 2004, to destinations up to four hours' flying time
EU COMPLAINS TO WTO ABOUT INDIA
The European Union has accused India of misusing trade
legislation and unfairly protecting manufacturers from imports. Brussels
has complained to the World Trade Organisation that India is not following
the correct procedure when hearing anti-dumping cases. Import tariffs are
too high on products such as chemicals, drugs and textiles, the EU says,
but Indian officials insist they are in line with WTO rules. The cost to
European exporters is put at about 50m euros (£35m;$61m) a year.
CALL FOR MORE LONG-TERM MORTGAGES
Many UK home buyers are unaware of the benefits to be
had from long-term fixed rate mortgages, according to a report
commissioned by the Treasury. Instead, they look for the lowest initial
repayments, even if the cheap deals last for only a couple of years.
EUROPEAN GO-AHEAD FOR RAIL ROUTE
European officials have cleared a joint venture between
Keolis of France and Britain's FirstGroup to operate a train service in
northern England. A new company, Trans-Pennine Express, will link cities
including Liverpool, Manchester, Leeds and Newcastle. The two firms are
involved in other UK rail franchises, but the European Commission says the
"operation does not ... present any competition concerns". The
deal includes £260m of new trains and a pledge to improve punctuality.
UK MOVING UP POVERTY LEAGUE
The UK may soon move out of the bottom of the European
poverty league because of "real progress" by government since
1997, say experts. The latest figures suggest poverty has dropped below
levels of the early 1990s, but progress has been slower on education and
TRADE DEFICIT NARROWS SLIGHTLY
Britain's trade deficit with the rest of the world
narrowed by less than expected in October, according to the latest
official figures. The Office for National Statistics said the UK imported
£4.4bn worth of goods more than it exported in October, above forecasts
of around £4.0bn. The higher than expected deficit partly reflected
production problems at a refinery, boosting petroleum imports. However,
the deficit for October was down from the previous month's £4.7bn.
US ON TOP IN TECH COMPETITIVENESS
The US is using information technology to boost
economic growth more than any other country in the world, according to a
World Economic Forum (WEF) survey. Singapore is in second place, with
European nations such as Finland and Sweden accounting for 11 of the top
DOW JONES BRIEFLY HITS 10,000
The Dow Jones briefly broke above the 10,000 points
level for the first time in 18 months on December 9. It went through the
psychological level after investors correctly anticipated that the US
Federal Reserve would leave interest rates on hold at 1%. The index,
listing firms like Microsoft and GE, reached the milestone in the first
minutes of trading. However, the Dow Jones could not hold on to its gains
and quickly fell back below 10,000 points again. It closed at 9,923.42,
down 41.85 or 0.4%, after some investors decided to cash in on their