INTERNATIONAL

 

Aug 02 - 08, 2004

 

1.INTERNATIONAL

2. PAKISTAN

3. GULF

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INDUSTRY BOOSTS BRITAIN'S ECONOMY

The UK economy has grown at its fastest pace in nearly four years, driven by a recovery in the industrial sector.
Gross domestic product (GDP) rose by 0.9% in the three months to June, up from a 0.7% gain in the previous quarter, government figures show.
That pushed the annual rate of expansion to 3.7%, the quickest since the third quarter of 2000.
Last Firday's data is likely to fuel expectations of a further rise in UK interest rates during August.

 

 

 

 

The Bank of England has already raised the cost of borrowing by 100 basis points since November last year to 4.5% in an attempt to cool consumer demand and the booming housing market.

Separate figures from the Office for National Statistics (ONS) published on Thursday, showed that UK retail sales jumped by 1.1% in June, compared with 0.7% in the previous month.

Howard Archer, an economist at Global Insight said that: "A 25 basis point interest rate hike in August must now be a done deal".

He went on to say that Global Insight expects borrowing costs of as much as "5.25% by the end of the year".

UK production rose by 0.9% in the second quarter the fastest rate in nearly five years boosted by gains in the manufacturing, mining and quarrying sectors.

That followed a 0.5% contraction in the figure during the previous quarter, the ONS said.

Meanwhile, service sector output also rose by 0.9%, mirroring the previous quarter's rise, and taking the annual rate of growth to 4.0%.

KERRY PLEDGES TO FIGHT FOR AMERICA

John Kerry has accepted his party's nomination as candidate for the US presidency in a keynote speech to the Democratic convention.

"I am John Kerry and I am reporting for duty," the Massachusetts senator told an ecstatic crowd in Boston.

He pledged to fight for a stronger America at home and abroad, saying strength was "more than tough words".

A well-received speech is being seen as vital for his chance of success against George W Bush in the 2 November poll.

The BBC's Rob Watson says that the speech went down extremely well with delegates at the convention, but the question now is how will it have played in the wider country.

In a fitting showbiz finale to the convention, Mr Kerry's speech was preceded by a film of his life story. Then, accompanied by crew mates from his Vietnam war days, the candidate took to the stage.

To the 4,000 delegates and to the wider television audience beyond, Mr Kerry described this presidential election as the most important of their lifetime.

The US, he said, was a country at war with terrorism and a country with economic problems at home.

In a clear swipe at President Bush, he said he would bring back what he called the country's time-honoured tradition of never going to war because it wanted to but only "if it had to".

"In these dangerous days there is a right way and a wrong way to be strong. Strength is more than tough words," he said.

He promised to lead strong alliances abroad but was careful to add that he would never give any nation or international institution a veto over America's national security.

Still not well known to many Americans, Mr Kerry used the speech to sell himself personally to US voters, paying tribute to his parents and family who he said had "inspired me to serve".

BANGLADESH FLOOD COST PUT AT $7BN

Bangladesh's government says the nation's devastating floods have caused nearly $7bn worth of damage.

The number of dead is now around 500 and there are fears that unusually high tides over the coming days will stop the rivers receding.

The flood water rose again in parts of the capital, Dhaka, last Thursday as heavy rain fell on the city.

Across the country, millions remain homeless or stranded, camping out on tiny islands formed by raised roads.

The water is getting dirtier in Dhaka; 500,000 cubic metres of untreated sewage is escaping into the water every day.

It is being mixed with industrial waste from factories that is normally carried away by the rivers.

JAPAN BANK MERGER BATTLE HEATS UP

Japan's Sumitomo Mitsui Financial Group has unveiled plans to merge with ailing rival UFJ, potentially derailing an existing bid from Mitsubishi Financial.

The move casts doubt on the UFJ/Mitsubishi merger, a deal which would create the world's biggest bank.

Sumitomo's president, Yoshifumi Nishikawa, said the bank aimed to table a merger proposal later on Friday.

UFJ said it would continue to pursue a tie-up with Mitsubishi, but would weigh up Sumitomo's proposal.

A rival offer from Sumitomo has been on the cards since last Tuesday, when the bank won a court order blocking merger discussions between UFJ and Mitsubishi.

Sumitomo argued that the proposed tie-up would breach an existing agreement it had with UFJ to buy its trust banking operations.

Mitsubishi and UFJ had originally hoped that their merger, which would create a combined group with 188.7 trillion yen ($1.7 trillion, 0.9 trillion), would be complete by the autumn.

FRENCH BUSINESS CONFIDENCE SURGES

French business confidence has surged to a three-year high in July. The national statistical office index, which is based on interviews with executives at about 2,500 companies, climbed to 106 from 104 in June.

The reading is the highest since April 2001, and strengthens the evidence that many of Europe's largest economies are on track for long-term recovery.

Other reports this week have shown that German and Italian business leaders also are more cheery about the future.

According to INSEE, France's statistical office, the responses to its questions "highlight an improvement in industrial economic conditions".

KEY STATES REACH WTO FARMING DEAL

Leading members of the World Trade Organisation have agreed on key farming issues, the body's head Supachai Panitchpakdi has said.

The US, European Union, India, Brazil and Australia struck a deal after talks which ended on July 29.

But Mr Panitchpakdi warned that all 147 members had to agree for the reforms to take place.

"No WTO agricultural framework deal is possible without consensus from the entire membership," he said.

The WTO has set itself a deadline of midnight of July 30 to agree deals in the farm and industrial sectors, on services and on a new customs code.

The Geneva meeting is the first major summit since the breakdown of talks last September in Cancun, Mexico.

Poorer countries are demanding richer states cut farming subsidies, which they say deny them access to markets.

ID CARD PLANS 'BADLY THOUGHT OUT'

Plans for introducing ID cards in the UK are poorly thought out and vital details are still unclear, say MPs.

The Commons home affairs committee says ID cards should go ahead and can help fight organised crime and terrorism.

But it criticises a "lack of clarity" over how the scheme will work in practice, with too much information kept secret by ministers.

FEARS EASE AS YUKOS KEEPS PUMPING

Beleaguered Russian giant Yukos can continue to produce and sell oil despite an earlier demand to stop output, according to Russian officials.

The Justice Ministry said writs barring property sales were not meant to stop Yukos pumping out oil, ending the confusion which pushed up oil prices.

Yukos is facing bankruptcy as courts try to enforce a $3.4bn tax debt.

The company, which pumps a fifth of Russia's crude output, said that operations were continuing as normal.

 

 

OIL PRICE SURGE BENEFITS EXXON

US oil giant Exxon Mobil has turned in sharply higher profits, helped by soaring world oil prices.

Exxon said net income for the three months to June came in at $5.8bn (3.1bn), up from $4.1bn during the same period last year.

The price rally lifted Exxon's sales by 24% from the year before to $70.7bn.

POLISH CARS ARE CHEAPEST IN EU

Car prices are converging across the European Union but there are still huge differences between countries, a new report has concluded.

Cars are cheapest in Poland, according to the European Commission, and most expensive in Austria and Germany.

The Commission found that prices were gradually flattening out, although differences of more than 20% were common, particularly for luxury models.

The EU introduced new regulations in 2002 in order to liberalise the market.

UK CONSUMER DEBT HITS 1 TRILLION

The amount of money owed by consumers has broken through the symbolic 1 trillion barrier for the first time.

The Bank of England (BoE) has said that consumers owe more than 1,000 billion pounds on cards, mortgages, and loans.

According to the BoE, about 80% of UK personal debt is in the form of loans secured against dwellings, such as mortgages and re-mortgages.

Debt charities are warning consumers to think hard about whether they can manage their debt when rates rise.

According to the National Consumer Council, about six million families are already struggling to keep up with credit commitments.

SHELL AGREES DEAL WITH REGULATORS

Oil giant Shell has agreed to pay more than 80m in penalties to settle inquiries by US and UK regulators into the firm's restatement of reserves.

The company slashed its reserves by 20% in January, a move which cost three top executives their jobs.

News of the settlement came as the company unveiled second-quarter net income of $4bn (2.2bn) up from $2.6bn last year helped by high oil prices.

EADS PROFIT

Aero-space giant EADS said net profits for the first half of 2004 came in at 387m euros ($466m, 251m), up from a 66m euro loss in the same period last year.

HARRY POTTER HELPS WARNER PROFITS

Time Warner, the world's biggest media company, has seen profits top market forecasts, partly driven by earnings from its latest Harry Potter film. Profit in for the April to June period was $777m (428m).

DEFENCE DEALS DRIVE BOEING PROFIT

Surging military sales have seen Boeing rebound to a $607m profit, from a loss at the same time last year.

The US giant's defence business drove its gains which saw its revenues rise 3% to $13.1bn between April and June with military deals making $7.2bn.

JAPAN RETAIL SALES SLIDE IN JUNE

Japanese retail sales fell in June as bad weather and fewer shopping days kept many consumers at home.

The Ministry of Economy, Trade and Industry said that sales fell 2.9% from a year earlier and slid 0.6% from May.

The decline was more than analysts had forecast and has raised a question mark over whether better economic conditions are filtering down to consumers.

Personal consumption is a key component of the world's second-largest economy and vital to any lasting recovery.

The concern for many observers is that wages and employment seem to be lagging even though exports and growth forecasts have jumped ahead.

 

 

INVESTORS BACK REYNOLDS-BAT DEAL

Shareholders in US tobacco giant RJ Reynolds have backed its proposed $3.2bn merger with Brown & Williamson.

An overwhelming majority of shareholders voted in support of the merger with the US unit of British American Tobacco (BAT).

TAXES HIT FRENCH TOBACCO SALES

Heavy tobacco taxes, introduced as part of a French health drive, have triggered a 20% drop in cigarette sales in the country, official figures show.

The cost of a pack of cigarettes has surged 30% since the anti-smoking campaign began in October last year.

The average cost of a packet is now around five euros ($6, 3.50).

CALIFORNIA STRIKES DEAL ON BUDGET

Arnold Schwarzenegger has secured a last-ditch agreement on California's $103bn (56bn) budget, after weeks of often bitter wrangling with senators.

Democrat and Republican politicians finally consented to a budget that neither raises taxes nor cuts spending too deeply.

In order to keep solvent, however, California will have to borrow heavily.

CAR REGIME AWARDED IMF LOAN

The Central African Republic's post-coup regime has been awarded an $8.2m (4.5m) post-conflict assistance loan by the International Monetary Fund.

Since seizing power in 2003, the government of General Bozize had made improvements in the areas of public finances, the IMF's Anne Krueger said.