The Fed, which raised US interest rates two weeks ago,
is more optimistic about the outlook.
"There's going to be a little bit of a slowdown
effect," Mr Bernanke said during an interview on PBS's 'Nightly
"But at current levels, anyway, I think it won't
derail what looks like a self-sustaining expansion at this point."
He added that consumer spending "has picked up
fairly considerably... and that is going to support growth going
On business channel CNBC, Mr McTeer also underlined the
robustness of the US economy.
"I don't think it is in jeopardy," he said.
Growth "is self-sustaining and it's not terribly fragile".
Helping soothe investors' nerves further, the price of
oil on Monday fell back from recent record highs after pumping in northern
Southern exports also are returning to normal levels
following militia threats to pipelines.
A barrel of New York light crude fell 67 cents to
$46.05, while in London, benchmark Brent Crude slid 51 cents to $43.03.
Analysts said that any dip may be short term and prices
still may top the $50-a-barrel mark.
CHINA'S ECONOMY 'STILL AT RISK'
China's leaders should not relax their efforts to cool
the country's fast-growing economy, the International Monetary Fund has
The IMF's latest health check on China's booming but
unbalanced economy found that "a soft landing...is not yet
It urged China to introduce a more flexible exchange
rate without delay.
The IMF now expects China to grow 9% in 2004, beating
an earlier forecast of 8.5%, before cooling to 7.5% in 2005.
The IMF found signs that Beijing's efforts to curb
reckless lending for expansion projects by its undisciplined banking
system are paying off.
But it remains concerned that China's rapid growth
could still tip over into a damaging crisis if pressure on the banks is
Beijing has issued a blizzard of edicts warning of
tougher scrutiny of bank lending, freezes on loans for new factories in
over-supplied sectors like steel, and penalties for officials who ignore
The IMF warned of the limitations of political pressure
as a method of regulating the economy, pointing out that "if the
administrative controls become less effective, credit growth could take
Many economists think that sweeping reforms to China's
financial institutions are needed to introduce more effective credit
checking systems and market-driven controls.
China's banks are weighed down by bad loans to state
enterprises, estimated at 45% of loans by credit agency Standard and
GROWTH IN ASIA 'CUTTING POVERTY'
Asia's surging economic growth has helped to reduce
levels of poverty in the region, a report has said.
The Asian Development Bank (ADB) estimated that the
number of people living on less than $1 a day fell to 22% of the region's
population in 2002.
That compares with 34% in 1990 and shows
"considerable progress in the fight against poverty", the bank
The poor may be getting richer, but the gap between the
haves and have nots continues to widen, the ADB said.
Some areas have lagged and the ADB identified South
Asia as a region where more needs to be done.
The ADB found that 93% of the extremely poor, those
living on or below the $1-a-day threshold, were to be found in India,
China and South Asian countries.
In India, 357 million people were living in extreme
poverty, with 203 million in China and 77 million in South Asia.
CBI TRIMS UK GROWTH EXPECTATIONS
Higher oil prices and rising interest rates are likely
to lead to a slowdown in spending on the UK High Street, business leaders
The Confederation of British Industry said it was now
reducing to 2.8% its forecast for economic growth in 2005.
The CBI said the Bank of England "must not
overdo" interest rate rises as recent moves seem to be having the
desired effect of calming the economy.
The group assumes interest rates will reach 5.25% by
early next year.
The Bank of England should not raise rates above that
figure, the CBI said in its quarterly economic forecast.
SUNFLOWER OIL BOOST TO CAR FUTURE
UK scientists have developed a process for making
hydrogen from sunflower oil which could prove an important future source
of eco-friendly energy.
A University of Leeds team says the development could
make hydrogen-powered vehicles a more realistic proposition.
The researchers envision a small unit inside a car that
would pull hydrogen out of the oil to drive a fuel cell.
The team has presented details of its research to the
annual meeting of the American Chemical Society.
As petroleum supplies gradually dwindle and the impacts
of global warming become more pressing, the arguments in the eyes of some
people for moving from an oil-based economy to one based on hydrogen
become more and more persuasive.
But making hydrogen can be expensive — and with some
methods will produce as much greenhouse gas as oil-burning itself.
GERMAN ECONOMIC GROWTH PICKS UP
German economic growth has picked up in the second
quarter, driven by strong demand for exports.
Europe's largest economy grew by 0.5% in the three
months to the end of June from the previous quarter and 2% from the same
period a year earlier.
Analysts however question whether the economic recovery
can be sustained.
They expect exports to fall in the second half of the
year and fear that domestic demand will not be strong enough to compensate
for this fall.
ONE MILLION JOIN RANKS OF US POOR
The number of Americans who slid into poverty last year
rose despite US economic growth, official data shows.
Figures from the US Census Bureau show that the ranks
of the poor grew by 1.3 million people to 35.9 million.
FEWER MORTGAGES APPROVED IN JULY
The number of mortgages approved for house purchases
fell by more than a fifth in July, according to the British Bankers'
A total of 70,756 new loans were approved in July, down
from 88,859 in June and almost 90,000 lower than in the same month last
SHELL 'FACES $1.5BN NIGERIA BILL'
Nigeria's Senate is reportedly to ask a Shell unit to
pay $1.5bn (£0.84bn) compensation to oilfield communities for
"The motion was overwhelming passed and the Senate
Committee on Petroleum was asked to monitor compliance," Reuters
quoted a Senate spokesman as saying.
Shell Petroleum Development Corp (SPDC), owned by Royal
Dutch/Shell, said it was unaware of the ruling.
The resolution is said to follow a petition by members
of the Ijaw tribe.
They are based in the southern Bayelsa state, where
Shell and other multinational companies have operations.
SPDC operates through a joint venture in Nigeria, in
which it owns 30% while state-run Nigerian National Petroleum Corp owns
SOUTH AFRICAN GROWTH ACCELERATES
South Africa's economic growth has accelerated in the
first half of 2004, the country's central bank has said.
All major industries have seen a pick up, helped by low
interest rates, high commodity prices and government policy, the South
African Reserve Bank said.
The economy grew by an annualised rate of 3% in the six
months through June, up from 1% a year earlier.
The central bank said that conditions are now
favourable for faster and more sustainable job and economic growth.
CHINA RAISES DOMESTIC FUEL PRICES
China will raise domestic petrol and diesel retail
prices by 6% as crude oil prices stay near record highs.
Gasoline prices are expected to rise by 240 yuan ($29;
£16) a tonne last Wednesday while diesel will rise by 220 yuan per tonne,
industry sources say.
The cost of crude oil has climbed by almost 50% this
year, pushing prices close to the $50-a-barrel mark.
China is one of the world's biggest oil importers and
its demand for oil is seen as a main cause of high prices.
INDIA BUDGET VOTED WITHOUT DEBATE
India's parliament has passed the national budget amid
a boycott by opposition parties.
There was no discussion on tax proposals announced as
part of the 4,780 billion rupees ($104bn) budget.
The lower house passed the budget by a voice vote as
opposition MPs stayed away after alleging that Prime Minister Manmohan
Singh had insulted them.
Parliament has been disrupted for weeks by a political
standoff over ministers facing criminal charges.
The main opposition BJP says the prime minister refused
to discuss the budget at a private meeting.
But the prime minister's office has denied that Mr
Singh had insulted the opposition leaders saying Mr Singh had only said
that any discussion of the budget should take place in parliament and not
NEPAL BLOCKADE 'BLOW TO TOURISM'
Tour operators in Nepal say that they lost up to five
million dollars due to cancelled bookings by foreign tourists last week.
They blame the cancellations on what they say was
exaggerated reporting on the week long Maoist-imposed blockade of the
The rebels lifted the blockade last Wednesday amid
mounting national and international pressure.
The blockade sent prices up and put pressure on the new
MILK DEAL 'TO HELP DAIRY FARMERS'
Supermarket chain Sainsbury's has agreed a new milk
supply deal which could benefit hundreds of UK farmers.
Robert Wiseman and Dairy Crest have won long-term
supply contracts with the firm, which sells £228m of milk a year.
The dairies take milk from farmers co-operative First
Milk — set up to get a fairer deal for farmers who said they were being
squeezed by supermarkets.
Wiseman expects to pick up an extra £60-70m at retail
value from the deal and Dairy Crest a further £8m.
As a result of the agreement, Sainsbury's milk supply
deal with Arla Foods will end in January 2005.
LOAN TARGETS BRAZIL'S ENVIRONMENT
Brazil is to get a $1.2bn (£0.67bn) loan from the
World Bank over four years to help protect its environment.
The bank says it is the largest single loan given to
protect a country's environment, with an initial payment being made this
year of $505m.
The cash is to ensure Brazil, thought to have the
greatest biodiversity on earth, considers environmental issues and
management in government policies.
"For us, this (loan) is highly relevant,"
said a government minister.
The money will be used to hire more environmental
experts to quicken the process of licensing projects, including offshore
oil rigs and hydro-electric plants.
The country will have 17 years to pay back the loan at
an interest rate of 4.9%.
ASIAN TOBACCO TRADE LIMITS URGED
Southeast Asia's free trade agreement should not
include tobacco because of the health risks and costs, the World Health
Organisation (WHO) has said.
The Association of Southeast Asian Nations (Asean)
plans to cut tariffs between members to under 5% by 2008.
The WHO urged that tobacco be exempt from the agreement
so that governments can raise prices to discourage its use.
NORTHERN CYPRUS TRADE BAN LIFTED
Turkish Cypriots have begun trading with their Greek
Cypriot compatriots in the south of the island for the first time in three
The introduction of inter-island trade is part of a
package of EU measures to boost the economy of northern Cyprus.
It comes after Turkish Cypriots voted in favour of
reuniting the island in a poll last April.
But the rejection of reunification by Greek Cypriots
meant the north remained excluded from the EU.