Gordon Brown was forced to raise his public sector
deficit forecast for the fiscal year to £37bn, up from £27bn figure
predicted in his Budget speech in April. And the government has already
accumulated a public debt of £36.1bn so far during the current financial
year, the ONS revealed.
However, January and February are traditionally months
when some public debts are repaid, so the £37bn forecast could still be
met. The chancellor has been forced to borrow more money to back Labour's
pledge to pour billions of pounds into ailing public services,
particularly schools and hospitals.
Publicly, the Mr Brown has remained upbeat about his
ability to meet his "golden rule" of balancing the budget over
the economic cycle, but some economists may opt to doubt the certainty of
the "prudent" chancellor. Michael Hume, economist at Lehman
Brothers, described the PSNB figures as "pretty grim".
"Although the December figures look OK, the November revisions are
pretty drastic and not good news for the chancellor at all.
"We're getting to that point now where the
chancellor is going to come under pressure from outside opinion that his
fiscal rules are not going to be met."
WHO WARNS OF MORE LETHAL BIRD FLU
The World Health Organization fears that the bird flu
which has broken out in several Asian countries could mutate and become
WHO spokesman Bob Dietz said in Vietnam that it could
become more of a threat to humans as it spreads. Bird flu has killed five
people in Vietnam and infected millions of chickens across Asia. Thai
Prime Minister Thaksin Shinawatra said it was "highly likely"
that people had caught the disease in his country.
He said test results from five suspected cases would be
Japan has suspended imports of chicken from Thailand.
Cases of the disease have been detected in Japan,
Taiwan, South Korea and Vietnam.
Humans who have caught bird flu are thought to have
been directly infected by live chickens. Only a small number of people
have so far been infected.
But scientists worry about the possibility of
human-to-human transmission, the BBC's Kylie Morris reports from Bangkok.
Japan suspended imports of Thai chickens following news
that three people in Thailand were being tested for bird flu.
Critics accused the Thai Government of a cover-up when
it suggested that an illness which sparked the recent cull of a million
chickens was not bird flu, but chicken cholera or bronchitis.The public
health ministry acknowledged it was investigating whether a number of
people — including a seven-year-old boy and a chicken farmer — could
be suffering the human form of the disease, virus subtype H5N1.
BIRD FLU FEARS STALK THAI ECONOMY
Thailand's poultry industry stands to lose at least
$2.6bn if the country's chickens have caught avian flu, the deputy
agriculture minister has said.
Japan has suspended imports of Thai chickens as a
precaution while the Thai authorities investigate. Stocks in chicken
exporters fell steeply on the Bangkok stock market after news of the ban.
About 60% of Thailand's chicken exports go to Japan but this accounts for
only one third of Japan's imports. Thailand is one of the world's top five
"If we find this disease in Thailand, the chicken
industry in Thailand will collapse immediately," Deputy Agriculture
Minister Newin Chidchob said.
Stocks in poultry exporters were among the heaviest
fallers on the Bangkok stock market.
DAVOS HEARS ANTI-CORRUPTION PLEA
Rebuilding Iraq, improving relations between Muslim
nations and the West and fighting corporate corruption topped the Davos
agenda Jan 22.
US Attorney General John Ashcroft said his country was
"winning the war on terrorism" but that corruption remained a
threat to democracy.
Pakistan's President Pervez Musharraf. called for
"enlightened moderation" between Islam and the West.
His call echoed the Iranian president's opening plea
for "genuine dialogue".
The links between fighting corruption, battling poverty
and promoting democracy formed the major theme of the US Attorney
General's blue-print for a more peaceful world.
EUROZONE RECOVERY 'AT RISK'
The economic recovery in continental Europe is
"distinctly weak" and could easily be wrecked should the euro
continue to rise, the Organisation for Economic Cooperation and
Development (OECD) has warned.
In contrast, growth in the United States should
"remain very strong," said the OECD's chief economist,
Jean-Philippe Cotis, at the World Economic Forum in Davos.
He called on eurozone countries and the European
Central Bank (ECB) to "take every possible action to boost the
recovery" appreciate if the dollar got ever weaker.
And he chided the West's six largest economies — the
United States, Japan, France, Germany, Italy and the UK — for failing to
keep their budgets under control.
Mr Cotis said the global economy found itself in a very
CHINA'S GROWTH HITS SIX-YEAR HIGH
China's economy grew at its fastest pace for six years
in 2003, adding 9.1% to gross domestic product, official statistics have
The growth rate in the final three months of last year
was even more rapid, up 9.9%.
China's strong performance was due to growth in trade,
foreign investment, and consumer spending. Chinese officials are
predicting a cautious 7% growth in 2004, a figure most economists expect
to be beaten. China's performance makes it the fastest growing among the
world's major economies, outpacing the United States and far ahead of
KODAK CUTS 15,000 JOBS WORLDWIDE
Photography giant Eastman Kodak is to slash up to
15,000 jobs worldwide over the next three years.
BLACK SETS ASIDE $60M IN TAKEOVER
Press magnate Lord Black has agreed to set aside $60m
(£32.7m) to meet possible liabilities as part of his agreement to sell
It is part of conditions of the $466.5m takeover bid by
the Barclay brothers. Hollinger Inc. owns 30.3% of the equity and 72.6% of
the voting control of Hollinger International, which owns the Daily
Telegraph and other newspapers.
FORD SEES BIG INCREASE IN LOSSES
Ford has reported a $793m (£430m) loss for the fourth
quarter of 2003, after it was hit by the cost of job cuts in Europe and a
new supply deal. For 2003 as a whole, Ford said earnings totalled $495m
OBESITY COST US $75BN: STUDY
A new study says that obesity cost the United States
$75bn (£40bn) last year.
The study by the Centre for Disease Control and
Prevention found that more than half that amount — nearly $40bn (£21bn)
came out of public taxes.
The researchers say these figures show that urgent
action needs to be taken to reduce the number of dangerously overweight
NEW EVIDENCE HALTS 9/11 VERDICT
A German court has agreed to allow a new prosecution
witness in the trial of an 11 September suspect which appeared to have all
but crumbled last month. The dramatic move has delayed the verdict in the
case of Abdelghani Mzoudi which was expected this week.
Mr Mzoudi, 31, is accused of being an accessory to the
murder of more than 3,000 in the 2001 attacks on America and membership of
a terrorist group.
The Moroccan national was freed after new evidence cast
doubt over the case.
US PONDERS PLASTIC BAG TRADE WAR
The US government has warned that it is considering
imposing anti-dumping tariffs on Asian plastic bag makers. The US Commerce
Department has said it may impose tariffs of up to 123% on Chinese,
Malaysian, and Thai plastic shopping bag producers.
The Commerce Department said it would continue its
investigation and reach a final decision in June. The US imported about
100 billion plastic bags in 2002, worth more than $127m, and China
supplied about 30%.
MCDONALD'S WIDOW'S WHOPPER GIFT
The widow of the man who founded fast-food restaurant
chain McDonald's has left $1.5bn (£820m) in her will to the Salvation
Army. Joan Kroc's gift is thought to be the biggest ever given to a single
Mrs Kroc left the money on condition that the Salvation
Army uses her burger bar fortune to build community sports centres for
working class children. She has asked the Salvation Army to build more
than 25 centres in the US.
ONLINE AUCTION SITE CLICKS AGAIN
Online auctioneer eBay has reported a quarterly net
profit rise of almost 64% in a strong period of sales listings.
The San Jose, California-based firm posted
fourth-quarter net profit of $142.5($77m), up from $87m a year ago. Chief
finance officer Rajiv Dutta said eBay planned to continue investing
internationally in countries like China, and developing new products.
MASS PANIC GRIPS ZIMBABWE BANKS
Hundreds of Zimbabweans have besieged several new banks
to withdraw their money amid rumours they are going bust. The panic
follows a crackdown on alleged corruption in financial institutions, which
has left at least six banks in serious trouble.
TOURIST SURGE CUTS HK JOBLESS
Unemployment in Hong Kong has dropped to its lowest
level for almost a year as wave of tourism repairs the economic damage
done by the deadly Sars virus. Joblessness fell to 7.3% between October
and December, down from 7.5% in the previous three months, official
figures showed. Unemployment hit a record 8.7% in the May-to-July period,
after Sars kept visitors away from hotels and shops.
STRIKE HITS FRENCH RAIL COMMUTERS
A strike by railway workers in France has brought
disruption to commuter train services around Paris last week. High speed
train services and the Eurostar link between London and Paris have been
less severely affected.
GM PREDICTS STRONGER CAR MARKET
Detroit legend General Motors (GM) has unveiled a slump
in profits at its core car production arm.
The company said its car division earned $396m (£218m)
in the final three months of 2003, down by 24% on the same period one year
earlier. Overall earnings came in little changed at $1bn, thanks mainly to
record profits from GM's GMAC finance unit, which specialises in mortgage
BANK VOTED 8-1 FOR RATE FREEZE
The Bank of England voted decisively against a rise in
interest rates during this month's Monetary Policy Committee (MPC)
meeting, it has been revealed. Released minutes show the decision to keep
rates on hold at 3.75% was reached by a majority of eight to one.
OECD WARNS ON UK BUDGET DEFICIT
The rising UK budget deficit may force the government
to raise taxes or slow the rise in public spending.
The warning comes from the influential Organisation for
Economic Cooperation and Development (OECD), the think tank for the
world's richest countries. The OECD says that its projections suggest
"the need for further fiscal action" to avoid "diminishing
the credibility of the fiscal framework". The chancellor hopes faster
economic growth will reduce the deficit. But the OECD says that the UK
budget deficit will exceed the limit set by countries in the eurozone of
3% of GDP by 2005.
UK INFLATION REMAINS UNCHANGED
Britain's annual inflation rate remained steady in
December, defying expectations of a fall.
The government's preferred consumer prices index (CPI)
measure remained unchanged from November's figure of 1.3%, official
FINANCE MINISTERS FRET OVER EURO
European finance ministers have banded together with
the European Central Bank to voice their fears that the euro is getting
too strong, too fast. A joint statement released at a meeting of the 12
eurozone finance chiefs last week warned of the risk to economic growth by
the euro's volatility. "We particularly stress stability and we are
concerned about excessive exchange rate moves," they said.