In its twice-yearly World Economic Outlook, the IMF
said 2005 growth "while still solid, will therefore likely be
somewhat weaker than earlier expected".
It added: "The balance of risks has shifted to the
downside with further oil price volatility a particular concern."
The global economy expanded by 3.9% in 2003.
IMF chief economist Raghuram Rajan said the rise in oil
prices was likely to have only a moderate impact on growth and inflation
in the industrialised world.
He said the developed countries are now more adept at
dealing with oil price jumps and central banks have gained greater
credibility in combating inflation.
But he warned emerging nations remained vulnerable and
urged their central banks to be vigilant.
Worries about oil prices have heightened as crude
soared to above $50 a barrel this week, amid increasing demand from China
and India, and fears over supply disruptions in the Middle East and
UK WRITING OFF POOR NATIONS' DEBT
Gordon Brown has pledged the UK will write off its
share of debts owed by the world's poorest countries.
The chancellor encouraged other rich nations to do the
same in a bid to lift the burden of debt repayments from Third World
The UK holds about 10% of the total debt owed to the
World Bank and other development banks.
He made the announcement in a speech at St
Bartholomew's Church, Brighton, last week, ahead of the Labour conference.
"Although there is no international agreement on
100% multilateral debt relief, Britain will do more," Mr Brown told
about 400 debt-relief and fair-trade activists.
"We will pay our share of the multilateral debt
repayments of reforming low-income countries.
"We will make payments in their stead to the World
Bank and African Development Bank for the portion that relates to
Britain's share of this debt."
His move will put pressure on other major creditors
such as the US, Japan and Germany to follow suit at meetings of the IMF
and World Bank.
France and Canada are already understood to be planning
Mr Brown currently holds the chair of the IMF and has
long promoted policies to solve the international debt crisis, including
100% relief on bilateral debt owed directly to the UK by heavily-indebted
Campaigners believe his initiative, for which £100m a
year has been put aside, could mark a turning point in efforts to lift the
burden of debt on the developing world.
It would free Third World governments to devote a
higher proportion of their budgets to health, education and economic
KERRY, BUSH CLASH OVER IRAQ WAR
US President George W Bush and his Democratic
challenger John Kerry have clashed in a TV debate on how to handle the war
in Iraq and homeland security.
Mr Kerry called the conflict a diversion in the broader
struggle against terror.
Mr Bush said he was confident of poll victory because
he had shown the American people he knew how to lead.
The two men were taking part in the first of three
televised debates in the run-up to November's election.
At times, the president seemed uncomfortable at the
criticism, but was soon in his stride, says the BBC's Rob Watson in Miami
where the debate was held.
There were several sharp exchanges, Senator Kerry at
one point saying the president's certainty about issues did not make him
right, but neither man appeared to deliver a knock-out blow.
They are set to meet in another two debates before the
election itself on November 2.
As expected, Mr Kerry made Iraq the focus of his
challenge against the president, saying the war in Iraq had been a
diversion that had no links with the September 11 attacks and was a
"colossal error of judgement".
"I believe in being strong and resolute and
determined. And I will hunt down and kill the terrorists, wherever they
are. But we also have to be smart. And smart means not diverting your
attention from the real war on terror in Afghanistan against Osama Bin
Laden," he said.
Mr Bush rejected Mr Kerry's accusation that invading
Iraq had been the wrong priority, arguing that he had to deal with both
Osama Bin Laden and Saddam Hussein.
FINANCE MINISTERS MEETING IN US
International debt relief and the value of the Chinese
yuan are expected to be top of the agenda as global finance ministers meet
for talks in Washington.
The US capital is hosting meetings of both the World
Bank and International Monetary Fund (IMF), and the G7 group of leading
China, which is being called upon to allow its currency
to float freely, has been invited to join the G7 meeting.
In addition, all three meetings are to discuss the
issue of debt cancellation.
Speaking ahead of the meetings, US Treasury Secretary
John Snow said more debt relief is needed.
However, he did not specifically endorse a British
proposal to erase all debts from the poorest countries.
CHINA'S THIRST FOR OIL GETS INTO TOP GEAR
China is not the biggest oil consumer in the world,
that prize goes to America, nor is it the biggest importer — which is
also the USA.
What China outdoes the rest of the world at is the
growth of its appetite.
Ten years ago China imported no oil at all. Last year
it overtook Japan to become the world's second biggest importer.
Its thirst continues to grow. Imports are expected to
rise another 40% this year.
For the international oil market it has all come as
something of a shock.
The reasons are not hard to find.
The BBC Beijing bureau overlooks the city's second ring
Ten years ago, the road was devoid of traffic, the odd
bus, a few taxis, and lots and lots of bicycles. Today it is gridlock.
At five in the afternoon it is more like a six lane
parking lot. In the last few year, the Chinese have taken to cars with
alacrity. Beijing now has more than two million private cars.
US GROWTH FIGURES REVISED UPWARDS
The US economy grew more quickly than previously
thought in the three months to June, official figures suggest.
The US Commerce Department said it had revised its
estimate for second quarter growth to 3.3%, up from its previous estimate
Wall Street economists had predicted that second
quarter growth would be upgraded to just 3%.
The Commerce Department said the new figure partly
reflected an unexpectedly strong build-up of unsold goods.
Business stockpiled more goods during the April to June
quarter than originally thought, offsetting a surprise decline in consumer
spending, it said.
The higher growth estimate also reflected a downward
revision in the value of goods imported into the US during the quarter.
The new growth estimate, although well below the 4.5%
expansion recorded in the January to March period, will help soothe fears
that the economic recovery is running out of steam.
JAPAN'S PRODUCTION GROWING AGAIN
Japanese industrial production grew in August for the
first time in three months, official data has shown.
Although only a month-on-month rise of 0.3%, and below
some forecasts, the news saw Japan's leading shares rise for the first
time in nine days.
Easing fears that Japan's economic recovery was
stalling, the Ministry of Economic, Trade and Industry (METI) now expects
a 1.3% rise in September.
"There is no reason to change our assessment that
the nation's industrial production activity is in a rising trend,"
said an METI official.
Across Japan's industrial sectors, steel and autos
showed the highest rate of growth in August, while the electronics and
computer sectors saw slower growth.
Sales of electronics and computer-related products are
however expected to accelerate ahead of the key Christmas and winter bonus
shopping season, analysts said.
RECORD HURRICANE LOSSES PREDICTED
A recent spate of storms in the south-eastern US could
leave insurers facing their biggest ever hurricane damages bill, an
industry body has said.
Insured losses could reach $21.7bn (£12bn), according
to the Insurance Information Institute, breaking the record set by
Hurricane Andrew in 1992.
The insurance industry had to pay out $15.5bn, or $20bn
in current values, to repair the damage caused by Andrew.
The Caribbean and southern US have been hit by four
storms since mid-August.
The most recent, Hurricane Jeanne, killed six people
and left up to two million without electricity when it swept through
Florida at the weekend.
INDIA'S ECONOMY CONTINUES TO GROW
India's economy has grown by 7.4% in the first quarter
of the financial year — April to June.
The performance, which is better than expected, is said
to have been driven by a good showing in manufacturing and service
That has helped offset a relatively poor performance in
the agricultural sector of the economy.
Analysts say an improvement in agriculture is crucial
to sustaining the momentum for growth.
Agriculture accounts for nearly a quarter of India's
economy with more than half its one billion population engaged in it.
KYOTO 'WON'T HIT' RUSSIAN ECONOMY
Russian economic growth is unlikely to suffer because
of government support for the Kyoto Protocol on climate change, a leading
analyst has said.
Some economic advisers had warned that Russia could
face economic crisis if it had to cut greenhouse gas emissions.
But Russia has to cut emissions from levels set at the
height of Soviet output, Dafne Ter-Sakarian, of the Economist Intelligence
This makes it unlikely that Kyoto will hurt the economy
in the short term.
STRIKE HITS SA PLATINUM PRODUCER
Workers at the world's second-largest platinum
producer, South Africa's Impala, have gone on strike, stopping production
at its largest mine.
About 17,000 employees failed to turn up for work on
Sept 30 at Impala Platinum's mining and processing centre eighty miles
north of Johannesburg.
The dispute centres on the terms of a two-year wage
deal and talks should resume further.
Impala said the walk-out would cost it 28m rand
(£2.4m) a day.
INDIA REJECTS FOREIGN ECONOMISTS
A top Indian government body that prepares the
country's economic blueprints has decided to drop foreign experts from its
It had earlier invited experts from organisations such
as the World Bank, the Asian Development Bank and management consultants
But following strong opposition from communists,
India's Planning Commission has decided to drop the idea. Communist
parties are the biggest ally of India's new Congress-led government.
SPORTS MARKETING FIRM IMG BOUGHT
US buyout firm Forstmann Little is to buy giant sports
and lifestyle management company IMG.
The firm is being acquired from trusts set up by IMG
founder, Mark McCormack, who died in May 2003, and from the family of IMG
vice-chair Arthur Lafave.
IBM IN $320M PENSION SETTLEMENT
Computer giant IBM has agreed a $320m deal with older
staff, who had argued that changes to its pension scheme left them worse
The deal, which caps the firm's future liability at
$1.7bn, must still be approved by a US court. IBM had earlier feared the
pensions dispute could cost it up to $6.5bn.
GET REAL ON AFRICA, URGES BONO
Bono, lead singer with the Irish rock band U2, has
urged Labour to "get real" and deal with the problems of world
poverty and the Aids crisis.
Tony Blair and Gordon Brown were the John Lennon and
Paul McCartney of the global development stage, he said praising their
But he urged the pair to "finish what they
started" and end world poverty.
Britain had a real chance to effect change when it took
up the G8 presidency next year, he said.
If a rich country "with the reins of power in its
hands" could not lead the fight against world poverty then critics
who called him "Labour's apologist" would be right, he said.
CONOCOPHILLIPS BUYS LUKOIL STAKE
US oil giant ConocoPhillips has bought a 7.6% stake in
Russia's Lukoil from the Russian state.
ConocoPhillips clinched the deal after other potential
buyers failed to match its $1.98bn (£1.1bn) bid in a government auction.
SRI LANKAN GOVERNMENT UPS PRICES
Sri Lanka has raised bus fares, energy and food prices,
amid a hike in diesel costs, according to AFP news agency.
The price rises also follow a worse-than-expected
balance of payments deficit, the agency reports.
Last week, more than 1,000 opposition activists took to
the streets of Sri Lanka's capital, Colombo, to protest at the rising cost
Private bus operators will be allowed to increase fares
by up to 16% to offset the 19% rise in diesel costs.
MMO2 LIFTS REVENUE TARGET FOR UK
Strong growth in UK customer numbers at mmo2 has
enabled the mobile operator to raise its UK revenue growth forecast.
In a trading update, mmo2 said it now expected UK
revenue to grow by 9-12% in the year to the end of March, compared with a
previous forecast of 7-10%.
The rise comes despite regulators forcing it and other
mobile firms to cut connection fees for calls from landlines by about 30%.
H&M PROFITS RISE ON US POPULARITY
Profits at Swedish fashion retailer Hennes &
Mauritz rose more than expected in the third quarter as its clothes sold
well in the US.
The company made a pre-tax profit of 2.45bn crowns
($333.2m;£185m) in the June-to-August quarter, up from 2bn crowns for the
same period in 2003.
CHEVRON DENIES KAZAKH TAX CLAIM
ChevronTexaco has denied it is facing a $2.5bn
(£1.4bn) claim for back-taxes over its Tengizchevroil (TCO) venture in
An official from Chevron's Russian partner Lukoil had
previously said TCO owed money.
CUBA TO SHUT PLANTS TO SAVE POWER
Cuba plans to close more than 100 factories for all of
October as part of a plan to deal with power shortages.
Other measures to save energy include a shorter working
week, reduced street lighting and scheduled power cuts.
The power shortages have caused a range of problems
affecting the flow of drinking water in homes and causing fridges and
freezers to stop working.
STRIKE HALTS ASSAM TEA PRODUCTION
A strike by tea plantation workers in India's
north-eastern state of Assam has brought work in about 800 tea gardens to
Tea worker leaders called the one-day strike to fight
for better health care and greater financial incentives.
They say 600 workers have died in the past three months
due to diseases like gastroenteritis and malaria.
India's tea industry, the world's biggest, faces a
crisis with falling prices, exports and consumption.
MORTGAGE LENDING AT 12-MONTH LOW
Mortgage lending slowed to its lowest level in a year
in August, figures from the Bank of England have shown.
Total mortgage advances were £25.14bn ($45bn), but net
lending — which strips out repayments — eased to £8.38bn, the lowest
level since August 2003.
The figures suggest consumers are becoming increasingly
wary about taking on fresh mortgage debt.
Net consumer credit — which covers other loans and
cards — was up slightly at £1.9bn in August.
FAIR TRADE PROTEST TARGETS LABOUR
Thousands of people took part in a protest outside the
Labour Party conference in Brighton to highlight inequality in world
The Trade Justice Movement (TJM) organised rally, which
was a Latin American-style protest with pots, pans, whistles and drums.
The protest launches TJM's new campaign called Vote For
Protesters were asked to cast a vote at giant ballot
boxes on the beach in support of fairer international trade.
WE'VE MUCH MORE TO DO, SAYS BROWN
Gordon Brown has told the Labour faithful the party can
create a Britain that leads the world by being both prosperous and
They must move beyond winning votes to winning hearts
and minds, to create a "progressive consensus" around
"liberty, duty and fairness", he said.
His Brighton speech turned the focus back on the
economy, away from Iraq.
Mr Brown told delegates they must have confidence in
Labour's values, saying: "We have much more to do."
GOLD SCORES NEW HIGH IN EUROPE, SILVER UP
Gold scaled new five-and-a-half month peaks in Europe,
moving above $417 an ounce as funds seized on a struggling dollar to
extend their positions in bullion, dealers said.
Silver responded strongly as funds spread their
purchases, with the industrial and precious metal moving to levels last
seen five weeks ago around $6.90.
Spot gold stood at $416.55/$417.00 by 1050 GMT after
peaking at $417.45, its highest since April 13 and compared with
$412.65/$413.40 quoted late in New York on Wednesday.
Funds first took gold to new peaks as the euro
rebounded against the dollar and nudged currencies back into focus as the
market's major influence after high oil prices led nervy investors toward
safe-haven bullion earlier this week.