The 19 million acre (7.7 million hectare) Alaska
Arctic National Wildlife Refuge, known as America's Serengeti, is home
to caribou, migratory birds and other wildlife.
It has been specifically protected by Congress from
New Mexico Republican Pete Domenici said before the
vote that the refuge had the country's "most significant onshore
"We should do everything we can to produce as
much as we can," he said, quoted by the Associated Press news
But Massachusetts Senator John Kerry, who proposed
the amendment, said there was no way the US could drill its way out of
its energy crisis.
Correspondents say there is not much interest among
the oil companies in drilling in the refuge, as its economic potential
no longer seems promising.
However, some Republicans see the plan as a
political manoeuvre which could open the way for other environmentally
controversial projects such as drilling off Florida or California.
Previous votes to remove the ban on drilling have
failed, but the Senate's Republican majority increased after last
BROWN DENIES BUDGET 'BLACK HOLE'
Gordon Brown has insisted his spending plans are
"affordable" amid opposition claims he would be forced to
raise taxes if Labour wins the next election.
The chancellor doubled the level at which
homebuyers pay stamp duty, unveiled a rise in child tax credit and a
£200 council tax refund for over-65s.
The Tories say Mr Brown faces a 'black hole' in the
But he told BBC Radio 4's Today programme he would
not "take risks" with Britain's stability.
"All our public spending plans that I have
announced are affordable," Mr Brown said.
But Conservative shadow chancellor Oliver Letwin
said the problems for the economy lay in the future.
"Mr Brown is borrowing, as he has shown in
this Budget, £168bn across the next five years, even if you believe
his sums, and that means he is borrowing and spending too much and
therefore he is going to have to raise taxes after the election if Mr
Blair is re-elected. That is the real problem," he told Today.
Mr Letwin added: "If Mr Blair is re-elected
... there will be about £10bn or £11bn of extra tax rises that he (Mr
Brown) won't possibly be able to conceal."
Vincent Cable, for the Liberal Democrats, said the
Budget did not change the "big picture" but he accused the
chancellor of "tinkering with some very big problems", such
as council tax.
"The £200 for pensioners is simply a one-off
concession, for one year. It doesn't deal with any of the looming
problems on council tax that will be associated the revaluation of
council tax, when some people will get massive increases."
Mr Cable said taxation as a share of the economy
would go up under all three of the main parties.
US CURRENT ACCOUNT GAP HITS HIGH
The US current account deficit reached a record
$665.9bn (£345.4bn) in 2004 — driven by rising oil imports and
consumers' appetite for foreign goods.
The Commerce Department said the deficit as a
percentage of the total economy also set a record, rising to 5.7% from
4.8% in 2003.
The data is closely watched because it covers a
broad measure of trade — in goods, services and investments.
Some economists say the figures provide more
evidence of problems ahead.
The rising current account gap — the difference
between the flow of money in and out of the US — could lead to
further interest rate rises as the Federal Reserve moves to keep
inflation under control, they say.
The Commerce Department also said the fourth
quarter current account deficit had widened by 13% to $187.9bn.
JAPANESE ECONOMY STAGES RECOVERY
The Japanese economy expanded slightly in the last
three months of last year, emerging from a mild recession.
Japan's gross domestic product a measure of
economic growth — rose 0.1% over the period, beating government
forecasts of a 0.1% shrinkage.
In the previous two quarters, the economy declined
by 0.3%, conforming to the standard definition of a recession: two
consecutive quarters of decline.
Economists pointed out that the figure still
represented almost flat growth.
The most positive contribution to the increased
growth seemed to come from Japanese businesses building up
On an annualised basis, Japan's GDP rose 0.5%.
This compared with an initial government estimate
of a 0.5% drop and economists' forecasts of a 0.6% decline.
US TRADE GAP EXPANDS TO $58.4BN
The gap between US imports and exports has widened
to the second-highest level on record as US shoppers continued to buy
goods from overseas.
The trade deficit in January was $58.3bn (£30.2bn)
well above December's $56.4bn and higher than forecast.
The news put added pressure on the weakened dollar,
as the euro traded up at $1.3463 from $1.3424 last Thursday.
Investors remain concerned that the widening trade
gap, as well as the budget deficit, threaten future growth.
The trade deficit makes up much of the red ink in
the US's current account, the measure of the divergence between the
US's incomings and outgoings.
Both the current account and budget deficits —
the latter currently close to $500bn — are funded largely by the
purchase of dollar-denominated debt by foreign central banks.
EU WARNS OF SHRINKING WORKFORCE
Europe needs more family-friendly policies and
possibly more immigration as the number of working-age Europeans
continues to shrink, a new report says.
The European Commission document says the EU's
population would already be in decline were it not for immigration.
Falling birth rates and growing numbers of elderly
threaten to have a dramatic impact across the EU, it says.
By 2030 the EU is likely to have 35 million people
over 80 — double today's figure — but 18 million fewer children.
"It is time to act now," said EU social
affairs commissioner Vladimir Spidla.
The report — aimed at kick-starting the debate on
demographic change across the EU — says immigration from outside the
EU could help mitigate the ageing problem between now and 2025.
SCHROEDER UNVEILS KEY TAX REFORMS
German Chancellor Gerhard Schroeder has unveiled
corporate tax cuts aimed at helping Germany's 5.2 million unemployed
people back into work.
He outlined the plan to cut corporate taxes from
25% to 19% in a speech to the Bundestag, the German parliament.
Chancellor Schroeder then met opposition leaders at
what was labelled a crisis jobs summit, and said they had broadly
agreed with his proposal.
QWEST RAISES MCI OFFER TO $8.45BN
US telecoms company MCI said last Thursday that it
is considering an improved takeover offer from rival Qwest
MCI said it would respond to the offer — which,
if accepted, could derail its acceptance of Verizon's $6.75bn
(£3.51bn) bid — by 28 March.
Verizon and Qwest are vying for control of MCI, the
second-biggest long distance phone firm in the US.
Qwest said its bid values MCI at $26 per share, or
MCI said that Qwest's offer was 3.735 Qwest shares
for each MCI share and $10.50 in cash.
UK RETAIL SALES CONTINUE SLOWDOWN
UK retail sales inched higher last month, official
figures have shown, but sales over the Christmas period were even
weaker than previously reported.
Retail sales climbed 0.2% in February, but on a
three month basis — taking in the festive season — sales fell
The figures may reduce pressure on the Bank of
England to raise interest rates again in the short term.
WOLFOWITZ SEEKS TO CALM CRITICS
Paul Wolfowitz has reassured critics of his
nomination to head the World Bank that it will be safe in his hands.
"Before I have my own vision, I need to do a
lot of listening," he told the Financial Times, stressing his
deep belief in the "mission of development".
Mr Wolfowitz, the current US Deputy Defence
Secretary, insisted he was not looking to shift the Bank's agenda away
from poverty reduction. But his nomination by President Bush has
sparked a cool response.
TOYS R US 'TO BE SOLD FOR $5.7BN'
US retailer Toys R Us is to be sold to a consortium
of private equity firms for $5.7bn (£3bn), the Wall St Journal has
The consortium comprises Kohlberg Kravis Roberts (KKR),
Bain Capital and Vornado Realty Trust with each business owning an
equal stake, the paper said.
PROFITS JUMP AT INDEPENDENT NEWS
Independent News & Media has posted
forecast-busting results thanks to the conversion of the Independent
newspaper from a broadsheet to tabloid size.
Sales of the newspaper rose 23% in 2004, despite a
background of a declining market, the group said.
As a result UK revenues rose 8.7% to 201.9m euros
(£140.4m), and "robust growth" was seen across its
The Irish company added that pre-tax profits after
one-off costs had risen to 186.6m euros from 64.3m in 2003.
US SALES FALL PROMPTS GM WARNING
Tough competition and lower North American sales
have prompted General Motors (GM) to issue a profit warning.
The group said it now expects to lose $1.50 (78
pence) per share in the first three months of the year, compared to
previous forecasts of breaking even.
In January, GM said net profits had sunk 37% to
$630m in the last quarter of 2004, from $1bn a year earlier.
SRI LANKA WANTS MORE DEBT RELIEF
Sri Lanka is lobbying for an extension of debt
relief after the Paris Club confirmed it would freeze payments from
tsunami-hit nations this year.
The Paris Club of 19 creditor nations last Thursday
formally agreed the offer, first made soon after the tsunami.
Sri Lanka's finance minister said he would now be
pressing for the payment freeze to run till the end of 2007.
Sri Lanka, whose tourist industry was severely
damaged by the tsunami, had already signed up for the 2005 freeze.
UK UNEMPLOYMENT TOTAL INCREASES
The number of jobless people in the UK has
increased, figures from the Office for National Statistics show.
In the three months from November to January the
government's preferred ILO measure of unemployment rose by 22,000 to a
total of 1.41 million.
However, the number of people out of work and
claiming unemployment benefit dipped by 700 to 813,000 in February.
Meanwhile, average earnings growth remained
unchanged in the year to January at 4.4%.
US RETAIL SALES RISE IN FEBRUARY
US shoppers are recovering their will to spend,
with new figures showing a 0.5% rise in retail sales for February. The
Commerce Department also revised January figures upwards to 0.3%
growth, from previous estimates of a 0.3% fall.
The revision, coming after a 1.3% rise in December
retail sales, adds further weight to hopes for continued solid
Excluding car sales, retail sales were up 0.4% in
February and 1% in January despite the cold weather. One factor
causing January sales to rise was the redemption of Christmas gift
ECB OPPOSES RELAXING DEFICIT RULE
Jean-Claude Trichet, president of the European
Central Bank, warned European governments not to weaken controls
designed to keep their deficits small.
The rules state that budget deficits must stay
under 3% of gross domestic product, a measure of economic growth.
Mr Trichet made it clear at a committee of the
European Parliament that he does not want the rules weakened further.
EU finance ministers are divided on the issue and
will debate the rules in emergency meetings on March 20.
France and Germany have both broken the rules and
exceeded the deficit limit for three years in a row. Neither has had
penalties imposed on them as a result.
UK FACTORY GATE PRICES INCREASE
Prices charged by manufacturers rose faster than
expected in February, official figures have shown, as firms sought to
cover rising costs.
The Office for National Statistics (ONS) said the
price of goods leaving factory gates rose 0.4% on the month to stand
2.8% higher for the year.
Producer input prices rose 0.1% in February on
higher oil costs, giving an annual increase of 10.7%.