NOT SATISFIED WITH GROWTH
Trichet, President of the European Central Bank (ECB), has said that
economic growth in the eurozone is not "fully satisfactory".
he added that economic growth would be helped by a central bank policy
that ensured price stability and low inflation expectations.
comments come as the ECB resists pressure to cut interest rates.
left rates unchanged for more than two years despite evidence that
growth and manufacturing was slowing.
benchmark interest rate is currently 2%, compared with 4.5% in the UK.
have accused the ECB of not doing enough to stimulate growth and of
ignoring the problems faced by many companies in the 12 countries that
share the single European currency.
Trichet has argued that borrowing costs are at the right level and that
inflation, driven higher by record oil prices, needs to be kept under
speech to the Danish central bank on Monday, Mr Trichet said that,
"you will probably share the view that the growth performance of
the euro area cannot be deemed fully satisfactory".
it is equally true to say that the single monetary policy, geared
towards price stability and the anchoring of inflation expectations,
lends ongoing support to economic activity," he added. ECB-watchers
will be pouring over Mr Trichet's comments for any indication of future
interest rate moves.
majority of analysts do not expect a rate cut this year, especially as
there are signs that the economic environment is improving.
HIT JAPANESE COMPANIES
business confidence rose by less than expected in the last quarter after
sentiment was dampened by the ongoing high global oil prices.
of Japan's key tankan survey of sentiment among big manufacturers showed
a positive balance of 19 for the three months to the end of September.
compared with +18 for the previous quarter and with the +20 balance
which had been expected by the markets.
shares and the yen both fell after the publication of the report.
mid-afternoon trading, the Nikkei 225 index of leading stocks was down
22 points to 13,552, while the yen had dropped to a 16-month low against
the US dollar.
of Japan's tankan survey comes to its figure by subtracting the
percentage of firms reporting unfavourable conditions from those
reporting favourable ones.
[the latest business confidence survey] was slightly softer than
expected, likely due to a rise in input costs and higher energy
prices," said Masaaki Nanno, managing director of research at JP
global oil prices are being driven by strong demand, particularly from
recent hurricanes in the US have also kept prices high after they
damaged a number of refineries in the Gulf of Mexico.
separate report from the Ministry of Finance showed last week that
Japan's economy grew in August, boosted by a rise in household spending
and a decline in unemployment.
output also rebounded during the month, rising 1.2% in August from July,
the government said.
AWARDS MORE OIL CONTRACTS
European oil firms have won most of the contracts on offer at Libya's
second open licence auction.
Japanese companies, including Mitsubishi and Nippon Petroleum, were
awarded permits to develop oil fields.
Eni Gas and British Gas were also successful, with just one US firm,
Exxon Mobil, gaining a contract.
January, Libya's first offer of exploration licences in 40 years mainly
benefited US oil companies, prompting complaints from European firms.
US and EU
trade sanctions against Tripoli were lifted last year after Libyan
leader Muammar Gaddafi agreed to renounce weapons of mass destruction.
companies from all over the world put in bids for the 44 different
concessions on offer in Libya, which has the world's eighth-largest oil
country is a major producer of light crude oil, the kind favoured by
URGE TO SET UP COMMON MARKET
countries have been urged to set up an Islamic common market as a way of
boosting trade and development.
came at the end of a three-day World Islamic Economic Forum held under
the auspices of the Organization of the Islamic Conference (OIC).
in Kuala Lumpur said the OIC's 57 nations could gain economic clout
internationally by signing an Islamic free trade agreement.
present, OIC countries' collective GDP is less than 5% of the world
between OIC countries is worth about $800bn (£456bn) - no more than 7%
of global trade as a whole.
current OIC chairman, Malaysian Prime Minister Abdullah Ahmad Badawi,
told the forum that the world's 1.5 billion Muslims were "a huge
Islamic consumer market".
PRICE GROWTH REVIVES AGAIN
price inflation rose in September according to the latest figures from
the Halifax bank.
country's biggest mortgage lender says prices are now rising at an
annual rate of 3%.
figure is slightly higher than the 2.5% rate recorded in August - and
includes a 2% rise in just the past three months.
the Halifax in line with other recent reports indicating the housing
market may be picking up again.
mortgage lender's chief economist Martin Ellis said the Bank of
England's decision to cut interest rates in August had give a boost to
would-be home buyers. But he doubted that rampant inflation will start
UPBEAT DESPITE HURRICANES
market Lloyd's of London has said it should still record a profit this
year despite the costs of Hurricanes Katrina and Rita.
comments came as it reported a £1.4bn ($2.5bn) profit for the six
months to 30 June, up 21% on last year.
Lloyd's said the hurricane costs would make a significant impact on
PRICES DROP ON FALLING DEMAND
prices fell further on Thursday last after data from the US Energy
Department said American demand was now below the level seen a year ago.
said crude was being hit by falling US consumption of petrol and heating
oil in the face of high prices.
of petrol and heating oil rose sharply after Hurricanes Katrina and Rita
damaged US refineries.
of US light crude was down 29 cents to $62.50 in Far East trading, after
earlier falling as low as $62.23.
Brent crude was also down 29 cents at $59.83 a barrel.
prices have now fallen by 5% so far this week, and by almost 12% since
immediate aftermath of Hurricane Katrina, US light crude reached a
record high of $70.85 a barrel.
PASSENGER TRAFFIC BOUNCES BACK
traffic at British Airways has bounced back in September, despite
in-flight meal problems it faced in the wake of the Gate Gourmet
airline said it carried 3.21 million people on scheduled routes in
September, up 2.8% on the year before.
Pacific flights showed the biggest rise at 18.8%, with North and South
American traffic 8.1% higher.
fell 0.7% in August when BA staff went on strike in sympathy with sacked
Gate Gourmet workers.
'LACKING FOOD PATRIOTISM'
alone is not enough to sell British food, according to new research
conducted by food think-tank IGD.
found 87% of people consider farming to be important to Britain, but
only one in five will go out of their way to buy British food.
was conducted for food suppliers and the government to find out how to
bolster British produce.
as the EU's farmers move from production subsidies towards producing
what customers will pay for.
of origin seems to be low on the list of what shoppers look for,
according to the findings.
SWEETENS HOSTILE BID DEFENCE
plasterboard maker BPB has promised its shareholders more cash as a
reward for supporting its defence against a French takeover bid.
said it will hand back £600m through share buybacks and has pledged to
increase dividend payouts.
bidder Saint-Gobain is offering £3.6bn ($5.5bn) for the firm, but BPB
has said that the bid "fundamentally undervalues" the company.
has received interest from less than 1% of BPB shareholders.
its full-year dividend will rise from 23 pence in 2005/6 to 30 pence by
WARNING ON ZIMBABWE ECONOMY
economic decline has worsened, the International Monetary Fund (IMF) has
said, with inflation set to reach 400% by the end of the year.
2005 review, the IMF estimated that Zimbabwe's GDP would fall 7% this
year, a widening of 2004's 4% drop.
blames the situation on the growing inflation, foreign exchange
shortages and low farm output - and on recent attacks on black market
contrast, the government in Harare predicts the economy will grow in
administration of President Robert Mugabe has estimated that the economy
shrunk just 2.5% in 2004, and will actually expand 2% this year on the
back of improved tobacco and wheat crops and a successful mining sector.
BUYING GM'S SUBARU STAKE
has agreed to buy the 8.7% stake owned by General Motors in Fuji Heavy
Industries, the owner of Subaru.
35.4bn yen ($310.5m; £176m) deal will make Toyota the biggest single
shareholder in Fuji.
Motors wants to exit completely from Fuji, and plans to sell its
remaining 11.4% stake on the market.
and Fuji will now work to reach agreement on future collaboration, the
two Japanese firms said. Toyota also has shares in Daihatsu.
BOOST LIFTS KFC OWNER
Brands, the company behind fast food operator KFC and the Pizza Hut
chain of restaurants, has reported a 16% jump in profits.
Yum said its third quarter net profits rose to $214m (£122m), from
$185m the previous year.
which also owns the Taco Bell fast-food chain, said strong sales in the
US and robust growth overseas helped lift its earnings.
also reported a 3% rise in revenues to $2.24bn.
JUMP IN US MANUFACTURING
manufacturing posted a surprise increase during September despite a
surge in raw material costs.
Institute for Supply Management said its manufacturing index was 59.4 in
September, up from 53.6 in August. Analysts had expected a reading of
Federal Reserve is now likely to keep raising interest rates to head off
inflationary pressures, analysts said.
and petrol prices jumped as the US was hit by hurricanes and there are
concerns that costs will stay high.
index rose to 78 in September, up from 62.5 in August, the institute
warned that companies, already facing waning consumer demand, may
struggle to pass on the higher costs.
result, corporate profits may decline. US shares fell on Monday because
of these concerns.
positive to take from the report is that the US economy's growth seems
to be continuing along its road of recovery regardless of outside
shocks, analysts said
EQUITY WITHDRAWAL RISES
amount of money people are borrowing against the value of their homes
has rebounded, figures show.
equity withdrawal rose to £8.7bn between April and June from £6.44bn
in the three months to the end of March, the Bank of England said.
the first quarterly rise since autumn 2003, when mortgage equity release
peaked at £17.5bn.
figure has fallen since then, a factor which experts say helped trigger
the recent consumer spending slowdown.
latest upturn in this form of borrowing may be linked to the increase in
the number of property sales in the UK this year.
Dolphin, chief economist at Henderson Investors said: "Perhaps this
is another sign that the housing market has stabilised."
WEAPONS DEAL 'CANCELLED'
Africa says it is discussing the future of an arms contract with India,
after the Indian government apparently cancelled the deal.
military journal reported the deal with South African state arms maker
Denel had been cancelled, after allegations of corruption.
been investigating the deal since April. Denel denies impropriety.
KEEP UP STEEL DEMAND'
steel demand is expected to rise by between 4% and 5% in both 2005 and
2006, according to industry body the International Iron and Steel
organisation said this growth would continue to be fuelled by China,
despite efforts by Beijing to try to cool its runaway consumption this
IISI added that the picture was not perfectly clear and that global
demand may be hit by high oil prices.
raw materials costs also remained a challenge, it said.
estimates that global demand for finished steel products will be between
1.040 billion and 1.053 billion tonnes in 2006, compared with 972
million tonnes in 2004.
PUBLIC SECTOR GROWTH ACCELERATING
public sector is creating new jobs at a faster rate than private
business, according to the latest official data.
same time, UK productivity is now at its lowest level for 15 years,
further figures from the Office for National Statistics showed.
have long argued that the government sector trails behind the wider
economy in terms of productivity.
productivity grew by 0.5% in the year to July, the lowest since 1990 and
down from 2.5% a year earlier.