They appeared to have an immediate effect on the
currency markets, helping the euro fall against the dollar.
"The dollar-euro exchange rate, at least for the
Europeans, is not satisfactory," Mr Schroeder told the Financial
"I would just say that I believe the European
Central Bank has recognised that this relationship between the euro and
the dollar is not helping the export sector, to put it very mildly.
"I can imagine that as a result, with all due
respect for the independence of the ECB, there will be some consideration
about whether [euro] interest rates are at the right level."
Schroeder's opinions were later backed up by French
Prime Minsiter Jean-Pierre Raffarin.
Mr Raffarin said he "shares the view" that
the European Central Bank should consider cutting interest rates.
The current exchange rate between the dollar and the
Euro is "not good for either the US or Europe," Raffarin said.
UK 2003 GROWTH REVISED UP TO 2.3%
Britain's economy grew by 2.3% last year, a faster pace
than first estimated, official figures have shown.
The growth figure was revised upwards from the initial
estimate of 2.1% after evidence of stronger exports of services and
Analysts said the new figure meant that another rise in
UK interest rates could be on the cards. Earlier this month the Bank of
England raised interest rates to 4% to keep the economy from overheating.
The Office for National Statistics (ONS) figures showed that while the
fourth quarter figure remained unchanged at 0.9% on the previous three
months, year-on-year it grew by 2.8%.
That was up from the 2.5% estimated last month, making
it the strongest fourth quarter since 2000. Jonathan Loynes, of
consultants Capital Economics, said the revised figures would
"underpin expectations of more rate rises to come".
"This obviously lifts the starting point for GDP
growth this year and certainly lends some support to the strong growth
forecasts of the Treasury and Bank of England," he added.
Richard Batley, economist at Halifax, said the stronger
figures had come as something of a surprise. "We had expected a small
downward revision because of weaker than expected industrial production
numbers," he said. "The latest GDP figures are consistent with
our view that the economy is growing above trend. We still expect the base
rate to go up to 5% by the end of this year."
The 2.3% expansion during 2003 means the growth rate
came in the middle of the chancellor's 2.0 to 2.5% forecast made in last
GLOOM GROWS OVER EUROPEAN GROWTH
Europe's nascent economic recovery has been dealt a
blow by reports that show confidence waning in Germany and Italy.
The key Ifo poll of German executives unexpectedly fell
in February, while a survey of Italian consumers recorded its lowest ever
Economists cited the strength of the euro and
accounting scandals as some of the reasons behind the mood change. There
was better news from France where retail spending rose by 2% in January,
four times the normal monthly average.
However, French shoppers were lured to the cash tills
by discounts and there are mounting concerns that both corporate and
consumer spending may now tail off in coming months.
GREENSPAN WARNS OF BUDGET CRISIS
The US Congress must take action to reduce the swollen
US budget deficit, Federal Reserve chairman Alan Greenspan has said.
Mr Greenspan urged Congress to cut spending,
particularly on the state pension scheme, social security, before the Baby
Boomer generation starts to retire. The deficit could balloon under extra
demand for state pensions and Medicare, he warned. But he was upbeat on
the economy, saying 2004 got off to a strong start. The US budget deficit
is targeted to reach a record $521bn (£227bn) this year under spending
plans put forward by President Bush, who has promised to cut it in half by
2009. Democrat politicians have objected to the president's proposals for
tax cuts and a 7% rise in military spending as fiscally irresponsible.
US APPROVES NEW CANCER DRUG
The US government has approved a drug that aims to
treat cancer in an entirely new way.
The drug, known as Avastin, has been shown to prolong
the lives of those with advanced colon cancer. It works by starving
cancerous tumours of blood, thus preventing them from growing in the body.
Unlike chemotherapy, which works by killing all dividing cells, this new
drug will target only the cancerous tumours themselves.
The backing of the new treatment is being seen as a
potentially very significant breakthrough in the fight against cancer.
The drug has been shown to prevent the formation of new
blood vessels, thereby denying tumours the oxygen and other nutrients
needed for their growth. In approving it, the US Food and Drug
Administration described it as the first drug that had been proven to
delay tumour growth.
EU SET FOR TARIFFS ON US EXPORTS
The European Union is set to impose tariffs on US
companies that will cost American business hundreds of millions of
The EU trade commissioner said a 5% duty would be put
on exports from the US to Europe next week because of unfair help to firms
by Washington. Pascale Lamy said rates would continue to rise unless the
US changed its law. But with jobs an issue in the US, there will be
grassroots political pressure not to back down. The trade dispute between
America and Europe has been a war of words so far with tariffs threatened
but not imposed.
EXCHANGE RATES HIT ANGLO PROFITS
Mining giant Anglo American has seen profits slip as
the soaring value of key currencies knocked almost $600m off its bottom
The firm said it earned $1.69bn (£890m) in 2003,
slightly ahead of expectations but down 4% on the year before.
CHINA'S WEALTH GAP WIDENS TO GULF
China says the wealth gap between its urban and rural
citizens is now one of the largest in the world.
A new survey by the Chinese Academy of Social Sciences
found that in 2002 urban residents earned three times more than their
rural counterparts. It is an issue that has been in the spotlight lately.
But the man in charge of the study, Li Shi, says even the new figures do
not paint a true picture of the disparity which he claims is even wider.
Farmers pay their own health care and education costs,
meaning their real incomes are a sixth of China's urban residents.
SONY DELAYS PLAYSTATION RELEASE
Sony has announced it is to delay the US and European
release of the handheld version of its Playstation console.
The much-anticipated new device, called PSP, was set to
hit the shelves by the end of this year, but its launch has now been put
back to spring 2005.
Sony said it had decided upon the delay because it
wanted more time to prepare game software for the handheld unit.
HOUSE PRICES 'ROSE 3% LAST MONTH'
UK house prices soared during February at their fastest
rate in nearly two years, said the Nationwide.
The building society's findings show the property boom
is not over, and will cause worry at the Bank of England, which recently
raised interest rates. The mortgage lender said house prices rose by 3.1%
during the month, a rise of 17.1% over the past 12 months.
It is the strongest monthly increase since April 2002,
and the largest annual hike since July 2003.
IMF SEES FASTER GROWTH FOR JAPAN
Japan is set on a solid path to growth as its economic
prospects have "brightened", according to the head of the
International Monetary Fund (IMF).
IMF Managing Director Horst Koehler said Japan may grow
3% this year, ahead of the IMF's previous 2.2% forecast.
Business spending and Asian exports would drive the
recovery, he said.
The change of stance follows figures putting growth at
an annual rate of 7% at the end of last year — but showing prices were
falling faster than ever. The rise in the value of the yen in recent
months means imports are getting cheaper, accelerating the deflation that
has dogged Japan for some years.
BAE SYSTEMS SEES DIP IN PROFITS
Europe's biggest defence contractor, BAE Systems, has
reported a fall in pre-tax profits.
But the UK firm, which recently missed out on a £13bn
RAF aircraft refuelling contract, said its defence operations this year
would be slightly up on 2003.
BAE said pre-tax profits before exceptionals came in at
£760m, down from £796m last year
WARNING OVER ARMS SALES LOOPHOLE
The UK government is allowing the sale of weapons
components to "known human rights abusers", a new report claims.
A dramatic rise in sales to these nations undermines
the government's own ethical policies, say the charities Oxfam, Amnesty
International and Iansa.
The Foreign Office rejected the conclusions of the
Foreign Secretary Jack Straw said the rise in sales was
because production lines now operated internationally, but checks were as
rigorous as ever.
EU SUSPENDS US POULTRY IMPORTS
The European Commission has ordered a one-month ban on
live poultry and egg imports from the United States, after a bird flu
outbreak in Texas.
US officials say the outbreak is different from the
deadly Asian strand and poses a low health risk to humans.
But EU Health Commissioner David Byrne said
"safety had to come first", adding the EU would review the ban
A quarter of EU's annual egg imports come from the US,
worth 20m euros ($25.17m) in trade. The EU also imports some 450,000
day-old-chicks a year from the US, more than half its imports in this
category. Russia — the largest poultry export market for the US — and
Taiwan have also announced bans — but only on imports from Texas.
US ONLINE SALES HIT $50BN IN 2003
US shoppers spent more than $50bn shopping online in
2003, new figures show.
The numbers from the US Commerce Department indicates
online shopping grew by 26.3% from the year before.
E-commerce occupied 1.6% of total retail spending of
$3.5 trillion, up from 1.3% in 2003.
The sales were concentrated in the final three months
of the year, when holiday shopping meant e-commerce made up almost 2% of
total spending. Overall, retail sales grew 5.4% through 2003.
Unsurprisingly, the data continues the trend of rapid growth marked in
recent years for online shopping. And early figures for 2004 — showing
sales for Valentine's Day up 40% on the year before — indicate a
continuation of the trend this year.
The growth to the $50.4bn figure for 2003 does,
however, mark a slight reduction in the pace of expansion.
UN WARNS OF BIRD FLU'S HIGH COST
The spread of bird flu has been a disaster for Asia's
livestock industries, the United Nations food agency has warned.
The deadly disease may even threaten the region's
attempts to end poverty, said Jacques Diouf, head of the Food and
Agriculture Organization. Bird flu has killed 22 people in Vietnam and
Thailand. Big chicken-processing conglomerates in the region have seen
business suffer, while many small farmers face ruin.
US EMBARKS ON CHINA YUAN MISSION
US Treasury officials are heading for China to
inaugurate a working group to improve economic co-operation.
The meeting is the result of a summit between the two
nations' presidents, George W Bush and Hu Jintao, last year. The Treasury
said it would cover a range of issues, but would not go into detail about
whether it would focus on the dollar-yuan exchange rate.
The US has blamed China for keeping the yuan weak to
boost its economy, saying the policy is destroying US jobs.
POOR TRANSPORT 'COSTS UK £15BN'
The UK's "crumbling" transport system is
costing business up to £15bn a year, the British Chambers of Commerce
Just 10% of firms said the UK's system met their
transport needs, a study by NOP for the BCC found. "Crumbling
transport infrastructure is holding back British business," said BCC
director general David Frost. The study found loss of man hours due to
poor infrastructure was a problem for 84% of firms, with 37% saying it had
a significant impact on business.