Japan, Mexico and South Korea — the three top
importers of US beef — are already leading a list of more than a dozen
countries to ban US meat. The European Union has banned most US beef for
many years because of growth hormones.
The US dollar and Japanese stock markets fell earlier
as the suspected case was announced, while cattle futures slumped as far
as markets allow. Shares in McDonald's fell by about 5% on the New York
Stock Exchange, although the burger giant said its supply chain was not
linked to the suspected case. The US Department of Agriculture is
expecting more information on the infected tissue from experts at
Veterinary Laboratories Agency in Weybridge, Surrey, by the end of the
week. BSE has been linked to new variant Creutzfeldt-Jakob Disease (vCJD),
a human brain-wasting disease. First diagnosed in Britain in 1986, BSE
affected 178,000 British cattle and resulted in the eventual destruction
of 3.7 million animals. It cost British farming billions of pounds as
countries around the world banned British beef.
UK ECONOMY TOPS GROWTH ESTIMATES
Britain's economy expanded faster in the third quarter
than previously estimated, official figures show. GDP rose by 0.8% on the
quarter between July and September and was up 2.1% on the same period last
year, the Office for National Statistics (ONS) reported. The ONS had
previously estimated that the economy grew by 0.7% on the quarter and 2.0%
on the year. The upward revision was largely due to higher estimates for
health and social work and business activities.Greater activity in the
insurance services and wholesaling sectors also helped to boost GDP, the
ONS said. The third quarter figure — which analysts had expected to
remain unchanged — was the fastest quarterly growth since the third
quarter of 2002, which also came in at 0.8%.
The figures will lend further support to the Bank of
England's decision last month to raise interest rates for the first time
in nearly four years. Many analysts now expect a further increase in the
cost of borrowing early in the new year. However, while the upwardly
revised GDP figures may have provided some Christmas cheer for the
Chancellor, the news was not all good. Separate figures from the ONS show
that Britain's current account deficit ballooned to £8.1bn in the third
quarter, up from a revised £7.8bn in the previous three months.It was the
highest deficit since the final quarter of 2000 and was driven by larger
deficit in trade in goods. Britain's balance of payments deficit with the
European Union was £5.9bn, while with non-EU countries it stood at
£2.2bn, the ONS said.
GREYING JAPAN SEES BUDGET SWELL
Japan's rapidly ageing population will push its public
debt to new highs in 2004 despite cuts to defence, foreign aid and public
works spending. The draft 2004 budget, published last week, sees spending
rise to 82.11 trillion yen ($760bn; £430bn). Borrowing will rise 0.4% to
more than 36 trillion yen or almost half the overall budget, a new record.
The rise is driven by a 4.2% increase in social security as the number of
elderly Japanese swells. The rapid growth in social welfare programmes
comes as the cost of sustaining Japan's massive public debt — now
amounting to nearly 140% of gross domestic product — is also expanding
close to 5% in 2004. Defence is being cut 1% to 4.9 trillion yen, although
that still leaves Japan's defence budget among the highest in the
world.Overseas aid spending is to fall almost 5%.
ASIA SUSPENDS US BEEF IMPORTS
Countries across Asia have temporarily halted imports
of US beef after that country's first suspected case of "mad cow
disease" was announced. Japan, South Korea and Singapore acted within
hours of the news that a cow had tested positive in Washington state.
Japan is the largest buyer of US beef, and has had its own BSE scare with
nine cases of the disease. Australia, the world's largest beef exporter,
saw meat prices rise sharply in anticipation of extra sales.
South Korea's agricultural ministry said it would
suspend customs procedures on all US beef — effectively ending imports.
An agricultural ministry official told Yonhap, the state news agency, that
this was just a temporary measure and the final decision to ban US beef
would be made only after official test results were announced. About
two-thirds of beef imported to South Korea is from the United States.
DATA BOOSTS HOPE OF US RECOVERY
US economy growth figures showed that the world's
largest economy is well placed to continue its recovery next year.
Consumer spending and sentiment has remained buoyant. The Commerce
Department confirmed that the economy grew at its fastest pace for 20
years during the third quarter. Although economists warn that it is still
early days, there is growing hope that interest rates and tax cuts have
done enough to turn the US around.
The capture of deposed Iraqi leader Saddam Hussein and
a small dip in unemployment also has helped convince people that the
outlook is improving. Stock markets have reflected this new-found
optimism, with the US's benchmark Dow Jones Index climbing to a 19-month
high this week. Economic growth in the three months to September was 8.2%,
according to revised figures released by the Commerce Department last
DOLLAR AT RECORD LOW VERSUS EURO (BOX)
The US dollar continued its record-breaking slide
against the euro amid concerns about terrorist attacks over the Christmas
holiday period. The dollar slid as low as $1.2450 in New York on Dec 22,
before rebounding slightly. It also fell against the Japanese yen and in
Europe. Many investors were spooked by the US raising its security alert
over the weekend, warning that any attack may exceed those of September
PARMALAT IN BANKRUPTCY PROTECTION
Italian food company Parmalat has filed for bankruptcy
protection under new fast-track administration rules unveiled by the
government. The firm, which has revealed a multi-billion euro hole in its
accounts, is being dubbed "Europe's Enron". Two teams of
investigators are now ready to probe the firm's books, to see how it based
its business on an allegedly fake financial statement.
MORALE IMPROVES FOR FRENCH FIRMS
French businesses are more confident about the future
but shoppers are still wary, new figures indicate. According to the
national statistics office INSEE, business confidence rose in December to
its highest level since May 2001, suggesting hope for recovery. The
figures make a sharp contrast with latest consumer spending data, which
showed November to have registered the worst fall in seven years. That
could threaten the government's 1.7% growth target for 2004.
CHRISTMAS SALES 'UP ON LAST YEAR'
Christmas sales figures will be better than last year
but the overall picture is patchy, retail analysts have said. While
clothing stores have had a tough time, bumper sales for electrical goods
retailers and supermarkets will push 2003's figures above 2002, they say.
Yet analysts said the rate of the sales growth should be down this year at
2%, compared to last year's 5% to 6%. The warm autumn has been blamed for
the reduced clothing sales.
IRISH DRUG GROUP TO SELL UNIT
Irish pharmaceutical group Elan is to sell its European
sales and marketing business for £68m ($120m; 97m euros). It is being
bought by Medeus UK, a new UK pharmaceutical company, backed by venture
capitalists Apax Partners. Dublin-based Elan says the move will enable it
to focus on its core business of pharmaceutical research, development and
ARNIE DECLARES STATE OF EMERGENCY
The Governor of California, Arnold Schwarzenegger, has
declared a state of emergency following the powerful earthquake which hit
the state. The declaration allows state resources to be used to pay for
rescue and rebuilding work in the affected area. The governor announced
the move while visiting the town of Paso Robles, 300 km (185 miles) north
of Los Angeles. Two women died in the town, which was worst-hit by the
quake, after a building collapsed. The Republican governor and former
movie star said more than 50 people had been injured in the severe quake,
which had a magnitude of 6.5. Forty buildings were damaged while 100,000
people across the state experienced power cuts.
RUSSIA MAY VET POST-SOVIET RICH
President Vladimir Putin has indicated that some of the
country's best-known tycoons may be investigated to see if they amassed
their wealth illegally. Many of the country's wealthiest business people
made their money following post-Soviet privatisations. Some are thought to
have broken the law in a rush to gain from the free market. The news came
as Russia's richest man lost a fight for bail as he awaits trial on
charges of embezzlement and tax evasion totalling more than $1bn.
OPIUM THREATENS AFGHAN GROWTH: IMF
A huge surge in opium production and stubborn
insecurity are threatening the Afghan economy, the International Monetary
Fund has warned. In its first annual review of the war-ravaged country for
12 years, the IMF saw some progress in putting back together the country's
institutions.But it warned that donors would have to keep on contributing
for years to come. And it said opium farming, now worth half the official
national output — could become entrenched in the economy.
VODACOM'S $600M NIGERIAN PLEDGE
Vodacom, South Africa's leading mobile phone operator,
has pledged to invest some $600m in Nigerian number two operator Econet
BANK FINED $80M OVER ENRON ROLE
Canadian Imperial Bank of Commerce (CIBC) has agreed to
pay $80m (£45m) to settle allegations it helped Enron hide debts and
inflate earnings. Two CIBC executives also will pay fines totalling
$600,000 following an investigation by the Securities and Exchange
Commission (SEC). The discovery of widespread fraud at Enron led the
Houston-based energy company to collapse in 2001. Citigroup, JP Morgan and
Merrill Lynch have all previously paid fines.
CHINA MINER SOARS ON MARKET DEBUT
Shares in Chinese gold miner Fujian Zijin have soared
by more than 70% on their Hong Kong stock market debut. The company raised
$1.2bn Hong Kong dollars (£88m; $147m) in a flotation that was
oversubscribed 744 times. The sale, the most popular public offering in
Hong Kong since 1997, was fuelled by rampant demand for Chinese shares
among retail investors. Global gold prices, too, are firm, and mining
companies around the world have seen their shares in high demand.
NEWS CORP RISES AFTER US TV DEAL
Shares in Rupert Murdoch's media firm News Corp have
risen after regulators backed the firm's $6.8bn move into the US satellite
TV market. Approval of the bid to take control of Hughes Electronics,
owner of DirecTV, means Mr Murdoch can fulfil a 20-year dream of entering
US satellite TV. Investors bought News Corp's Australian shares, pushing
them up 1.5%.
INDIA 'ON TRACK FOR 8% GROWTH'
India could achieve economic growth of between 6% to 8%
a year in the next few years, a key World Bank official has reportedly
said. World Bank country director for India Michael Carter said:
"India is set to achieve impressive growth as the potential is
SWISS RETURN FIRST ABACHA FUNDS
Officials in Switzerland have approved the return of
some $88m (£50m) linked to Nigeria's late General Sani Abacha. Since
1999, more than $600m connected to the former military leader has been
frozen in bank accounts in Switzerland. The Nigerian government wants all
the money released as soon as possible, but Swiss officials say this can't
be done until investigations are completed. General Abacha is believed to
have embezzled as more than $2bn from Nigeria whilst he was in power.