However, the Federal Reserve's decision to raise
interest rates by 0.25% to 2% was seen as likely to help stabilise the
The euro rose to $1.3007 after it emerged that the US
had recorded a $51.6bn trade deficit in September.
The deficit was 3.7% lower than August's figure but
remained above $50bn due to high oil prices and a record $15.5bn deficit
The value of US exports rose 0.8% to a record
$97.5bn, providing evidence that the sharp fall in the value of the
dollar in recent times may be beginning to have an impact on America's
The US currency has been weakening for much of the
past year, pressured by worries over the US' record $427bn budget
SLOWING EXPORTS HIT GERMAN GROWTH
Germany's economic growth has slowed as export
weakness offset a rise in domestic demand.
According to the Federal Statistics Office, the
German economy grew just 0.1% in the three months to September, slower
The figure is the lowest since the outright
contraction in the second quarter of 2003.
Economists said the news meant growth figures for the
12-nation eurozone, would also be revised down.
The 0.1% expansion — making an annual growth rate
of 1.3% — follows a 0.4% reading for each of the first two quarters of
"The decisive factor in the weak economic growth
in the third quarter was — in contrast to the four preceding quarters
— declining exports," the statistics office said.
High oil prices are partly to blame, economists say.
But the sinking value of the dollar also poses a
threat, according to the ZEW survey of finance professionals.
The German economy is reliant on healthy exports, and
a falling dollar makes euro-denominated goods more expensive in the key
Stubbornly high unemployment has meant weak demand at
home, although the third quarter has shown an improvement.
Government efforts to rejig the benefits and pensions
system, with the intention of reinjecting some life into the labour
market, are meeting staunch resistance.
AUTO INDUSTRY LIFTS FRENCH OUTPUT
French industrial output soared in September as the
car sector bounced back from a summer slowdown.
Statistics agency INSEE said output rose by 3.2% from
August, its biggest rise in seven years, and far ahead of the 1.7%
expected by economists.
The increase partly reflected a return to full
production at a major Peugeot car plant which had closed in August.
The reopened Peugeot factory lifted total car output
by 22.5%, reversing a 16.3% fall the previous month.
Analysts said the output data suggested that
preliminary third quarter growth figures may be stronger than expected.
Most economists expect third-quarter growth to come
in at around 0.4%, down from 0.8% in the three months to June.
US OIL OUTPUT LOWEST SINCE 1950
US oil output has fallen to its lowest monthly level
in more than 50 years in the wake of Hurricane Ivan.
Daily output fell below five million barrels in
September for the first time since April 1950, according to new
Hurricane Ivan disrupted drilling operations and
pipelines in the Gulf of Mexico, with about 10m barrels lost.
The damage wrought by Ivan fuelled the spike in oil
prices which topped $50 for the first time in early October.
Ivan's impact is likely to be felt on production
figures for October and November.
The US Energy Information Administration has revised
downwards estimated output figures for both months.
BROWN SEEKS OUT GLOBAL CHALLENGE
The UK must invest more heavily in science and
technology if it is to hold its own in the global economy, Chancellor
Gordon Brown has said.
Speaking at the CBI's annual conference in
Birmingham, Mr Brown said his mission was to build "a shared
national economic purpose".
He called for a breaking down of trade barriers
around the world to meet the demands of globalisation.
Fiscal targets for the UK's current economic cycle
would be met, he said.
The UK must take action to keep pace with countries
like India and China, which are producing more and more graduates, Mr
China produces 125,000 computer science graduates a
year, while the UK only produces 5,000.
EAST ASIA POVERTY AT 'RECORD LOW'
East Asia will see absolute poverty at an all-time
low in 2004 as growth finally erases the effects of the 1997 currency
crisis, the World Bank says.
China's boom and a global recovery means regional
growth of 7.1% in 2004, the Bank said in its biannual outlook.
It said 40 million people, mostly in China,
Indonesia, Thailand and Vietnam, have been lifted out of poverty.
But high oil prices mean slower growth next year,
while any downturn in the tech sector could also cause problems.
The high budget and trade deficits in the US were a
risk too, meaning Asian countries should work to boost local investment.
However, any slowing of growth in China — down from
its breakneck peak of more than 9% in 2003 — could produce a more
steady, sustainable economic picture in the region, the Bank said.
LAPTOPS DRIVE DELL PROFITS BOOST
Computer giant Dell has boosted its profits once more
as lower component costs have helped its bottom line.
The firm, the biggest PC maker in the world, said its
net profit for the three months to September was $846m (£457m), up 25%
on the year before.
Sales rose 18% to $12.5bn, and Dell said it would now
reach $60bn in annual sales by next year — a year ahead of the
timetable it had set itself.
CHINA BUILDS ON TIES WITH BRAZIL
Chinese President Hu Jintao has arrived in Brazil, on
the first leg of a two-week trip to Latin America.
He is visiting Brazil in a bid to secure trade deals
to satisfy China's burgeoning demand for foreign goods.
Bilateral trade has grown strongly in recent years
and China is now Brazil's fastest-growing market.
President Hu hopes the Brazilian trip will lead to
trade agreements on beef, poultry, soya and ethanol, an important
The president, who is accompanied by more than 150
businessmen, also expects to sign an agreement to launch two new
satellites, servicing both countries.
Mr Hu will meet the Brazilian president, Luiz Inacio
Lula da Silva, and attend a joint session of Congress in his honour.
AUSTRALIA JOBLESS AT 26-YEAR LOW
Australia's jobless rate is at a quarter-century low,
giving a further reward to Prime Minister John Howard following his
recent election victory.
Unemployment in October was 5.3%, the lowest rate in
26 years of monthly surveys and only just above 1977's all-time low of
INDIAN BANKS 'TO BE MODERNISED'
The Indian government is planning legislation to
modernise the country's banking sector.
Finance minister Palaniappan Chidambaram said the new
laws would include a credit information bill and an act to help banks
recover bad debts.
He said financial institutions needed to use more
sophisticated technology to look and behave like global companies.
Profits before exceptional items for the three months
to 30 September were £549m ($1.01bn), up 4% on 2003. Profits for the
half-year fell to £983m from £1.03bn.
ICELANDIC FIRM BUYS FASHION CHAIN
Icelandic investment group Baugur is expanding its UK
retail empire again, this time with the purchase of budget fashion chain
Bauger is adding the 176-strong chain to its shopping
basket after ironing out a deal with, amongst others, retail tycoon
National Australia Bank, the country's biggest
lender, has seen its profits slump following a trading scandal.
Profit in the six months through 30 September was
1.61bn Australian dollars ($1.2bn) from A$2.04bn a year earlier.
NEW EU SET FOR QUICK EURO SWITCH
Brussels has said the EU's newest members should
adopt the euro in one step, in contrast to the currency's original
The European Commission said recently there was no
need for them to go through a transitional phase before introducing euro
notes and coins.
The first eurozone states launched the euro as a
virtual currency in 1999, but did not replace their cash until 2002.
The EC said this was "neither necessary nor
advisable" for the new countries.
In a report, the Commission said euro adoption should
go smoothly in the 10 new EU states as many people there had already
used euro notes and coins.
SKY-HIGH GOLD DENTS INDIA DEMAND
Recent sharp rises in the price of gold are weighing
on sales of the precious metal in India, despite the approach of the
Hindu Diwali festival.
Traders in Madras, also known as Chennai, told the
Reuters news agency that sales were down by about a third from their
normal daily average.
The decline comes as gold hovers close to a 16-year
high of $436.60 an ounce, fuelled partly by geopolitical worries. Diwali,
which falls on 12 November this year, usually sees gold sales peak.
US INTEREST RATES INCREASED TO 2%
US interest rates are to rise for the fourth time in
five months, in a widely anticipated move recently.
The Federal Reserve has raised its key federal funds
rate by a quarter percentage point to 2% in light of mounting evidence
that the US economy is regaining steam.
US companies created twice as many jobs as expected
in October while exports hit record levels in September.
CHINA'S BOOM COMES OFF THE BOIL
China's industrial output slowed in October, the
latest evidence that its booming economy is being reined in.
Production was 15.7% higher in October than in the
same month a year earlier, the statistical office said. Growth has
slowed from a 23.2% peak in February.
Economists have voiced concerns that China has been
expanding too fast.
The government has echoed these fears, limiting
investment and lending, and last month raising interest rates for the
first time in nine years.
UK OIL BALANCE MOVES INTO DEFICIT
The UK's oil trade balance swung into the red for the
first time in 13 years in September, the Office for National Statistics
(ONS) has said.
The oil balance deficit was £254m after output was
hit by delayed repair work on North Sea rigs, the ONS said.
The news came as the ONS revealed a surprise
narrowing in the UK's trade gap with the rest of the world.
A rise in exports to countries outside the European
Union helped close the gap to £4.55bn from £5.16bn in August. Experts
had forecast that the trade deficit would be little changed at £5.1bn.
UNREST BLOCKS IVORY COAST COCOA
Shipments of cocoa from Ivory Coast, the world's
biggest producer, remain blocked following three days of unrest.
The country's two ports were shut down on Nov 8,
after a ceasefire broke down and French bombing of the country's air
force sparked rioting.
A lull brought cocoa prices in London down 6% to
£953 a tonne, having leapt the day before.
VODAFONE BEGINS 3G MOBILE SERVICE
Vodafone has launched its UK third-generation (3G)
services for mobile phones, offering video calls, music downloads and
The 3G technology enables users to download data at a
faster rate than before, offering better quality sound, pictures and
Until now, 3, owned by Hutchison, has been the only
UK telecoms firm offering 3G services to mobile phones. Orange and
T-Mobile are set to begin UK 3G services in the next few months.
GREECE VOWS TO CUT BUDGET DEFICIT
Greece has vowed to ensure next year's budget deficit
meets European Union limits by curbing public spending and raising
revenue through privatisions.
The Greek government said it would also be able to
make savings now the huge costs of hosting the Olympics are over.
EU states are expected to have deficits below 3% of
gross domestic product but Greece's is set to hit 5.3% in 2004.
Greece's deficit breached the EU cap between 2000 and
2003 as the cost of the Olympics reached 7bn euros(£4.8bn).