The figures, which are due to be released in expanded
form, do offer some hope for likely performance in 2004. The component of
gross domestic product relating to consumption was relatively strong, the
Federal Statistics Office said. This could be an indication that companies
are starting to invest more, something that could promise eventually to
reduce Germany's heavy unemployment. "The relatively strong domestic
demand gives cause for hope that 2004 will be better," said Bernd
Weidensteiner of DZ Bank. "At some point consumption will become
unblocked and then all the pieces of the puzzle will be in place for a
BUSH SEEKS TOUGHER NUCLEAR CURBS
US President George W. Bush has called for co-ordinated
international action to curb the spread of nuclear weapons. In a speech at
the National Defense University in Washington, he demanded a strengthening
of international treaties and the UN nuclear watchdog. This would include
a limit on the number of nations allowed to produce nuclear fuel. Mr Bush
said nuclear weapons in the hands of terrorists and "outlaw
regimes" were a threat to world peace. His comments came in the wake
of a major scandal involving a leading Pakistani scientist.
The "father" of Pakistan's nuclear bomb, Dr
Abdul Qadeer Khan, has admitted supplying nuclear technology to North
Korea, Iran and Libya through a black market. The BBC's Rob Watson, in
Washington, says the timing of the speech was decidedly political, coming
from a president seeking to regain the political initiative in the vital
area of national security. Our correspondent says this was radical stuff
from Mr Bush, proposing nothing less than the unpicking of the 30-year-old
bargain between the nuclear haves and have-nots.
The president said international treaties intended to
regulate the development of nuclear power needed to be strengthened to
stop countries producing material which could be used for weapons.North
Korea and Iran had both done this by exploiting loopholes allowing the
enrichment and reprocessing of uranium for peaceful purposes, he said —
and this had to be stopped. He called on the 40 countries of the Nuclear
Suppliers Group, which sell nuclear technology, to refuse to sell
equipment to any country not already equipped to make nuclear fuel.
BANK FORECASTS STRONG UK GROWTH
The UK economy is set to grow strongly in the coming
year as the global economic recovery takes hold, the Bank of England has
said. The Bank also predicted that the new consumer price index (CPI)
inflation measure will rise in 2004. However, it said that inflation was
not expected to breach the 2% target level for two years. But some
analysts said the Bank's comments indicated that there could be more
interest rate rises on the way. The Bank's latest quarterly Inflation
Report said price growth was expected to rise from the middle of the year,
partly due to higher utility prices.
AUTO SALES STALL US RETAIL GROWTH
US retail sales surprisingly dropped for the first time
in four months in January, as automobile sales stalled. Figures from the
US Commerce Department showed retail sales falling 0.3% last month to
$322.87bn. Analysts had expected shoppers, who have driven the economy
along over the past three years, to keep up the same pace of purchases as
in December. Excluding autos, however, retail sales posted a 0.9% increase
with strong clothes and grocery sales. The figures come a day after
Federal Reserve chairman Alan Greenspan said the economy was growing
vigorously and reassured investors that no interest rate hike is imminent.
Sales of motor vehicles dropped by 3.9% but the rest of the retail sector
was boosted by a cold winter.
US SHOULD BALANCE, SAYS GREENSPAN
Federal Reserve chairman Alan Greenspan has painted an
upbeat picture of the US economy, at the same time as cautioning against
the spiralling budget deficit. Presenting the twice-yearly central bank
report, he predicted that the US economy will grow between 4% and 5% in
2004, up from previous estimates. Yet he also warned that the country's
vast — and seemingly ever-growing — budget deficit could pose a
problem in both the short and long terms. He called for more budget
balance. Mr Greenspan told a House of Representatives panel that the
runaway budget deficit — a political hot potato in this year of
presidential election — could create serious fiscal difficulties when
the 'baby-boom' generation retires.
BIRD FLU HITS US POULTRY INDUSTRY
A second outbreak of avian bird flu in the US is
threatening to damage the country's multi billion-dollar poultry industry,
officials have warned. Even though the strain found in the infected birds
is not thought to be transmittable to humans, buyers are not taking any
chances. China and Brazil have joined countries including Japan and South
Korea and banned all US poultry imports.Russia, the biggest buyer of US
birds, has scaled back its purchases. The US's total poultry exports are
valued at more than $1.7bn (£900m; 1.3bn euros) a year. According to
Richard Lobb, a spokesman for the National Chicken Council, the
"timeframe for restoring normal trade relations has lengthened a bit
because of this second flock".
MICROSOFT SOURCE CODE LEAKED OUT
Computer software giant Microsoft says parts of the
tightly guarded blueprints of its Windows operating system have been
leaked over the Internet. Microsoft spokesman Tom Pilla said the company
did not know how much of the source code had been leaked, or how many
people may have access to it.
The world's second biggest PC-maker, Dell Computer, has
posted net profits of $749m(£396m) for the fourth quarter, up from $603m
a year earlier.
GlaxoSmithKline has reached its 2003 profit targets.
Pre-tax profits for 2003 rose 8% to £6.72bn, with turnover up 5%, partly
due to strong sales of its asthma drug.
Mobile telecoms giant Vodafone has said it is launching
third generation (3G) services in the UK.
News Corp, the Rupert Murdoch-run media company, has
reported a jump in profit, helped by its newspapers and TV channels,
including Fox News. Profit in the quarter to 31 December surged 51% to
$361m (£191m) from a year earlier while sales rose 19% to $5.6bn.
UNILEVER SALES HIT BY ATKINS DIET
Unilever sales failed to reach their targets as
consumers ditched SlimFast in favour of the Atkins diet — but the hot
summer boosted ice cream sales. Sales of the Anglo-Dutch firm's leading
brands rose only 2.5% — missing targets of 5-6% growth set out last
The company's full-year net profit was 3.2bn euros
(£2.2bn; $4.1bn), compared with a loss of 20.7bn euros in 2002.
AIR FRANCE AND KLM GET GO-AHEAD
The planned merger between Air France and KLM has been
given the go-ahead by the European Commission.Creating the world's largest
airline, the two flag carriers first announced the coming together back in
September. The Commission has now approved the merger, but only after Air
France and KLM agreed to surrender 94 take-off and landing slots per day
to their rivals. In 2002-2003 the combined turnover of the two airlines
was some 19.17bn euros ($24.5bn; £13bn).
UK JOBLESS TOTAL CONTINUES TO FALL
Unemployment in the UK fell to a fresh two-and-a-half
year low in the final quarter of 2003, official figures show. The total
fell by 21,000 to 1,459,000 during the three months to December. The UK
jobless rate edged lower to 4.9% — the joint lowest level since records
began in 1984 - the Office for National Statistics (ONS) reported.
DIGITAL TROUBLE HITS NIKON SHARES
Shares in Nikon, the Japanese camera maker, have
slumped 10% after the firm warned falling revenues from digital cameras
would hit its bottom line. The company's announcement of a 7.4bn yen
($70m; £38m) loss for the three months to December follows similar ones
from rivals such as Fuji and Olympus.
EU SQUARES UP FOR BUDGET BATTLE
Brussels has unveiled plans to boost EU spending —
setting the scene for a battle with finance ministers. The European
Commission wants a major boost in spending as the EU expands from 15 to 25
members in May. But at least six states, including the EU's biggest
contributors, want the budget capped at its current rate. The issue is
exposing splits between the net givers — who fear expansion could cost
them billions — and the net receivers, keen to maintain their aid. The
current budget of around 100 billion euros (£70 billion) a year amounts
to 0.98% of the EU's GDP.Brussels wants to put the figure up to 1.22% of
GDP in the years after 2007. That would still come in under the permitted
upper limit of 1.24%.
Dutch electronics maker Philips has announced it
returned to profitability in 2003 following a year of job cuts and
restructuring. The company recorded a full-year net profit of 695m euros
($885m; £476m), company officials said.
US DEMAND SAVES UK TRADE BLUSHES
Britain narrowly avoided a record trade deficit in
2003, as exports to the US offset flagging demand in Europe. A
narrower-than-expected international trade gap in December of £4.16bn
($7.77bn) brought the full-year total to £46.4bn. The annual figure was
just short of 2002's deficit of £46.6bn, the widest since records began.
The UK's oil trade surplus shrank to £4.4bn, the lowest level since 1998
when it slipped to £3bn. Meanwhile, the annual surplus for services was
£10.6bn, the lowest since 1996.
AGEIST ATTITUDES 'COST UK £30BN'
A million unemployed people over the age of 50 could be
in jobs if industry and government shelved 'ageist attitudes', according
to Age Concern. Up to £30bn could be added to the UK economy if people
over 50 were brought into the workforce, the charity said. To ease older
people back into work Age Concern said the government should scrap
mandatory retirement ages.
DOLLAR SLIDE IGNORES G7 WARNING
The dollar has sunk against other major currencies,
squashing hopes that a meeting of leading industrial nations in Florida
could stem its decline. The meeting of finance ministers from the Group of
Seven had condemned "excess volatility" in exchange rates. The
warning was a dig at the way US authorities have encouraged the dollar's
slide, at first underpinning a rally for the greenback. But the gain
vanished to put the dollar at an 11-year low against the pound. The dollar
did recover slightly towards the end of trading in New York, trimming its
losses against both the euro and yen.
FACTORY OUTPUT REMAINS IN REVERSE
UK manufacturing output fell for the second month in a
row in December — casting doubt on a recovery in the beleaguered sector.
Office for National Statistics (ONS) data showed output fell 0.1% after a
revised 0.6% drop in November. The data conflicts strongly with recent
evidence hinting that a manufacturing recovery is gathering pace. But
there was some good news with factory-gate prices rising 0.2% on the month
or 1.6% in the year to January.
CHINA PUMPS UP RURAL SPENDING
China's government is to pump an extra 30bn yuan ($3bn)
into improving the lives of the country's 900 million farmers this year.
The increased spending forms part of a push to close the wealth gap
between town and country. It will pay for transport links, new rural
industries, schools and welfare services. China's top governing bodies
warned last week that stagnant farm earnings were putting stability and
growth at risk.
BANGLADESH OPTS OUT OF TRADE DEAL
Six Asian nations, led by India and Thailand, have
created a free-trade zone, but Bangladesh refused to sign the deal over
compensation issues. India, Burma, Sri Lanka and Thailand pledged to boost
investment and lower costs in a free-trade zone by 2017.
FARMERS DECRY US-AUSTRALIA PACT
Many of Australia's farmers are up in arms against the
free trade deal their government has signed with the US. The deal, reached
after two weeks of last-ditch talks, opens up US markets to many
Australian goods. But it leaves key tariffs on Australian farm goods
untouched while giving US farmers free access — factors which Australian
farmers see as a sell-out.