sector net borrowing (PSNB) in February was £1.06bn,
compared with £500m the same month a year ago, the Office for National
Statistics (ONS) reported. That was broadly in line with expectations,
with most economists predicting PSNB of £1bn. Delayed self-assessment tax
receipts helped the government run a sizeable surplus in the month, the
That led to an increase in tax receipts in February to
£13.9bn, compared to £12.4bn in the same month one year ago. But
spending is also higher than one year ago.
Public sector net debt outstanding at the end of
February totalled £361.1bn, equivalent to 31.7% of Britain's GDP — well
below the government's 'sustainable investment rule' of 40%. The news
about higher tax receipts will cheer the chancellor, who predicted in the
Budget that he will meet his fiscal rules going forward into the next
So Mr Brown is able to balance his £37bn Budget gap
this year against accumulated Budget surpluses in the early years of the
Labour government. The current economic cycle is expected to end by
2005/6, and there is much concern among experts about whether the
chancellor will have as much room for manoeuvre in future years.
TOUGH TALKS OVER BAN ON FOIE GRAS
US and European officials have clashed at a World Trade
Meeting (WTO), over an American ban on meat items such as sausages, hams,
and foie gras.
The ban followed visits to 11 French exporters by
American farm officials who deemed some French foods unsafe. But the
French farms minister insists food standards are higher in France. If the
ban were extended it could damage France-US trade worth more than 20m
euros ($25m; £13.3m) annually, according to estimates. It could also
cause some discomfort to some of the world's wealthiest people. Foie gras,
a pate made from the livers of geese or ducks, is found on the menus of
some the world's best restaurants, is popular with the rich on special
Hollywood actor Michael Douglas and his wife Catherine
Zeta Jones served it at their lavish $1.7m (£1.2m) wedding at a New York
The two-day meeting in Geneva of the WTO's committee on
sanitary measures, could lead to a formal complaint by the trade body. US
agriculture officials have denied the ban was in retaliation for an EU-wide
block on US poultry and egg imports after a bird flu outbreak in Texas.
At the time of the US visit to France, between 15
January and 5 February, US Agriculture Department spokesman Steven Cohen
said it was in response to worries first emerging in 1992.
Eleven French exporters were found to have
"repeated problems", he said.
French farmers say US export certification requirements
have become more exacting recently, and are so tough it is easy to find an
excuse to de-list an exporter and ban something.
GERMAN INVESTORS LOSE CONFIDENCE
Confidence among German investors fell in March, amid
fears about the speed of economic recovery and following the Madrid
bombings, a survey has found.
The Mannheim-based ZEW institute said its monthly gauge
of economic expectations fell to 57.6 in March, from almost 70 last month.
ZEW said responses before the bombings came out at 59.1 while the
responses after the attacks was 55.9. The drop was well below analysts'
expected figure of about 66.
OIL PRICES SURGE TO 13 YEAR HIGH
US crude oil prices have reached their highest level
since 1990 as ongoing global terrorism fears continue to put an upward
pressure on the market. With last week's events in Spain still fresh in
the mind of traders, the price of New York's benchmark light sweet crude
surged 70 cents to $38.18. This is the highest figure since 16 October
1990 — more than 13 years ago in the run up to the first Gulf War. The
upward pressure is also being driven by concern of low US stocks.
It is at this time of the year that America usually
stockpiles both crude oil and petrol ahead of its main consumption season
in the summer. Yet a number of recent official US government reports have
said that stocks are currently at historic lows.
IMF 'TO REVISE US GROWTH FIGURES'
The International Monetary Fund is to raise its
forecast for world economic growth in 2004 to 4.6%, Germany's Handelsblatt
The new forecast to be published in April is a 0.6
percentage point increase on the IMF's autumn prediction, the financial
daily says. The Fund has also upped its estimate for US growth this year
by 0.7% of a percentage point to 4.6%. But the forecast for the euro zone
remains unchanged at 1.9%.
Next year, growth of the 12 nations that share the euro
was likely to accelerate to 2.5%, the IMF predicts, says Handelsblatt.
NEW YORK SHARES CLOSE UP STRONGLY
Wall Street stocks closed up strongly last week, as US
investor confidence continues to recover on the back of pleasing official
economic data. Rebounding from the falls caused by events in Spain,
traders were cheered by official US inflation data coming in as expected.
The 0.2% consumer price figure for February came a day
after the Fed voted to keep interest rates on hold. By the end of trading
the Dow Jones was up 1.1% or 115.63 points to 10,300.30. The Nasdaq was up
33.67 points or 1.7% to 1,976.76.
SHELL CUTS OIL RESERVES AGAIN
Energy giant Shell has dealt a new blow to investor
confidence by announcing a second downgrade of oil reserves. The
Anglo-Dutch firm also delayed its annual report, due on March 19, until
later in the year. Shell sliced 250 million barrels off 2002 reserves, and
another 220 million from the figure for 2003.
US LASHES CHINA OVER CHIP TRADE
China is facing a complaint at the World Trade
Organisation for the first time since its joined in early 2002. The
complaint comes from the US, and represents a further intensification of
Washington DC's accusation that China's trade policy is costing US jobs.
The WTO case concerns tax breaks for Chinese
semiconductor makers, which the US says gives them an unfair advantage. US
trade chief Robert Zoellick said China "must live up to its
obligations" to create a "level playing field". The move
follows recent efforts by lawmakers on both sides of US politics — as
well as unions — to blame China for some of the stubborn stream of job
ADOBE PROFIT AND SALES AT RECORD
Software-maker Adobe has seen profit and sales climb to
record levels during the first quarter. Net income for the three months
ending February 29 topped analysts' forecasts and more than doubled from a
year ago to $123m (£67m), or 50 cents a share. Sales also surged, jumping
to $423.3m and prompting Adobe to increase its revenue targets for the
MORTGAGE LENDING HITS YEAR LOWS
Mortgage lending in the UK dropped to its lowest level
in almost a year in February, figures show. The Council of Mortgage
Lenders (CML) said a total of £20.1bn was advanced during the month, down
6.5% on January. A £1bn drop in remortaging which fell to a year low of
£8.3bn — was behind most of the fall, the CML explained.
Lending to property buyers also dipped £200m to
£9.8bn, but the CML said it was too early to say if this signalled that
consumer debt was cooling.
The $47bn (£25.8bn) merger between Bank of America and
Fleetboston has been approved by shareholders. The move will create the
third-biggest lender in the US with almost $1 trillion of assets and 5,600
BROWN SLASHES 40,000 WHITEHALL JOBS
A confident Gordon Brown has allocated extra cash for
schools and pensioners — but put the squeeze on Whitehall with 40,000
civil service jobs to be axed. Delivering his eighth Budget, the
chancellor froze a range of taxes and claimed the UK was enjoying its
longest period of economic growth since the Industrial Revolution. People
over 70 will get a one-off £100 to help cope with council tax rises,
while primary schools each get £55,000 for school improvements and
secondary schools get £180,000. But he admitted that the government would
have to borrow £37bn this year — £10bn more than he predicted a year
ago — and that borrowing would remain high for some years to come.
UK JOBLESS TOTAL CONTINUES TO SLIDE
Unemployment in Britain fell by 33,000 in the three
months to January to 1,436,000, official figures have shown. The ILO
measure of joblessness, the favoured government method of gauging
unemployment, is now just short of a record low set in March to May 2001.
And the UK jobless rate is now 4.8%, the lowest since records began in
MOBILE SALES BOOST CHINA TELECOM
China Telecom's profits rose in 2003 as a result of
people taking up its popular low-end mobile telephones. The country's
largest fixed-line telephone company also saw growth in the sale of its
broadband service. It reported net profits of 25bn yuan ($3bn) for last
year, compared with a restated 10bn yuan in 2002. China Telecom also
announced plans to issue shares worth roughly $3bn to fund the planned
acquisition of 10 provincial phone networks.
LOSSES SHRINK AT STEELMAKER CORUS
Steelmaker Corus has seen its losses narrow, amid
speculation a leading Russian businessman is seeking a boardroom role at
the Anglo-Dutch firm.
Europe's third-largest maker of steel unveiled a
pre-tax loss of £255m ($465.7m; 379.2m euros) for the year ending on 3
GLAXO TO BUY WELLCOME IN INDIA
British pharmaceutical giant GlaxoSmithKline has
announced plans to acquire the India division of Burroughs Wellcome in a
$162m (£89m) share swap.
GSK's India branch will offer 14 shares for every 10
shares in Burroughs Wellcome, company officials say. The parent companies
of GlaxoSmithKline Pharmaceuticals and Burroughs Wellcome merged nearly 10
FED KEEPS INTEREST RATES ON HOLD
As expected, the US Federal Reserve has voted to keep
interest rates on hold for the eighth time in succession.
With government data showing that the US economic
recovery is still failing to create more than a trickle of new jobs, the
basic rate is to stay at 1%. The bank has now kept the rate at this 1958
low since June of last year. Its Federal Open Market Committee was no
doubt swayed by latest figures showing that the US economy created a
meagre 21,000 jobs in February.
ANGLERS 'NET £113M FOR ECONOMY'
Angling is worth £113m a year to the Scottish economy,
according to a study.
The research also found that the sport supports 2,800
jobs north of the border and generates almost £50m in wages and
The lure of rainbow trout saw central Scotland record
the most angler days each year, accounting for more than a third of the
1.4 million total. However, more money was spent in the Highlands and the
north east in pursuit of salmon and sea trout. The report estimated that
anglers spend almost £43m in the Highlands and more than £31m in the
north east, compared to £21.5m in central.
CHINA MAY CUT HOME BUYING COSTS
China's authorities are considering property tax cuts
that could halve the cost of buying a home for ordinary Chinese, the state
media reported. The reports coincide with changes to the constitution to
protect the right to private property for the first time since 1949.
Economic data released last week also showed rises in consumer spending.
Consumer spending grew 10.5% in January and February, compared to 9.2% in
the same two months of 2002.
The government sees rising consumer spending as a vital
part of its strategy to maintain China's runaway economic growth, which
topped 9% in 2003 and is targeted at 7% this year.
BROWN OUTLINES SCIENCE STRATEGY
Chancellor Gordon Brown has launched a consultation
document on a 10-year investment strategy for science and engineering in
the United Kingdom. Speaking to senior industry figures, he pledged to
protect the increases he announced in the last Spending Review. These
increases will lift spending on the science sector to £3bn by 2005-6.