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  DEPARTMENTS
 

IN THE NEWS
. INTERNATIONAL
. PAKISTAN
 

 

 

 

 
  INTERNATIONAL

Nov 14 - 20, 2005

UK TRADE GAP NARROWS IN SEPTEMBER

Britain's trade gap with the rest of the world has narrowed in September following a record rise in the previous month as hurricane payments peaked.

The Office for National Statistics (ONS) said the trade deficit fell to 3.9bn compared with 5.3bn in August.

In that month the Lloyd's of London insurance market paid out 1.4bn in claims arising from Hurricane Katrina.

But the ONS said the long-term trend was essentially flat, with the trade gap at 3.8bn in July.

In the third quarter, however, the overall trade gap widened to 13.3bn compared with a 9.8bn deficit in the pervious quarter.

The UK traditionally runs a trade deficit in manufactured goods but a surplus in services such as travel, tourism, and accountancy.

UK exporters will be fervently hoping that recent signs of improving growth in Western Europe will be sustained and will increasingly feed through to boost exports

In September, the UK imported 5.44bn more manufactured goods than it exported - a slight improvement over the 5.9bn gap in the previous month.

The UK also was a net importer of oil for the second month in a row, as maintenance shut-downs and a fire at a oil rig reduced North Sea output.

The trade gap with non-EU countries also narrowed to 2.29bn, compared with 3.1bn in the previous month.

Analysts said the figures could point to an improvement in the UK's export prospects, particularly if there was a recovery in the eurozone economies.

SINO-US TEXTILE TO STABILIZE TRADE

China has said a tough trade deal to curb its soaring textile exports to the United States will make trade more predictable and stable, but industry experts reacted to the accord with scepticism.

After seven rounds of often difficult talks over the past five months, China and the US announced on Tuesday they had agreed to limit growth in Chinese textile exports to the US to an annual rate of 10-17 per cent.

"For the industries of both countries we have made the trading environment more predictable and stable," Bo Xilai, China's Minister of Commerce said.

At the same time, "developed countries should understand that free trade is the overriding trend and quota restrictions are inappropriate," Bo added.

Washington hailed the three-year deal as helping ease trade tensions, an important step before President George W. Bush's upcoming China trip.

Industry officials were sceptical about the accord, which covers up to seven billion dollars of Chinese exports, but conceded it at least removed a major element of uncertainty and that at least was positive.

They noted in particular the agreement to allow in textiles blocked in transit by the earlier imposition of safeguard quotas by Washington.

"Chinese manufacturers blindly boosted production ahead of any possible new quotas which led to a huge quantity of items blocked at customs," said Cao Xinyu, vice-chairman of the China Chamber of Commerce for Import and Export of Textiles.

BRITAIN FACING LARGE ENERGY GAP

Britain is facing a shortfall in energy supply in the near future, according to a major report.

Within a decade, the country may be generating only about 80% of the electricity it needs.

A panel of 150 experts says fossil fuels will remain the mainstay of supply, with renewables expanding and nuclear power almost certainly needed.

The panel urges the government to take steps quickly to solve the issue; doing nothing, it says, is not an option.

"Up to the year 2050, fossil fuels will remain the dominant energy source - there really is no alternative," said John Loughhead of the UK Energy Research Centre, who compiled the report following a two-day conference held last month under the auspices of the Geological Society of London.

The conference drew contributions from about 150 delegates representing all sectors of the energy field.

GERMANY SEES TRADE SURPLUS SOAR

Germany's trade surplus with the rest of the world widened to a record 14.8bn euros ($17bn; 10bn) in September.

Exports rose by 2.5% month-on-month to a seasonally adjusted 68.6bn euros, the Federal Statistics Office reported.

The surge in German exports contrasted with a 1.2% dip in imports during the month to 53.8bn euros.

Hopes for recovery in Europe's biggest economy are growing, with a recent report showing improved confidence among the country's business leaders.

A survey by Germany's Ifo research institute last month showed that its closely-watched business climate index was at a five-year high.

However, after growing strongly in the first quarter of 2005, Germany's economy slowed in the following three months. It is not expected to expand by more than 0.8% overall this year.

ASIAN RESERVES FELL IN OCT

Asia's foreign exchange reserves, excluding China, fell for a second consecutive month in October as foreign cash poured out of regional equity markets, analysts said.

Currency reserves in Japan, Taiwan, Hong Kong, Singapore, Malaysia, the Philippines and Pakistan dropped slightly and reserves in the region generally were expected to ease further in the months ahead.

Asian foreign exchange reserves, excluding China, fell by $4.9 billion in October to stand at the end of the month at about $1.87 trillion. China releases reserves data at the end of each quarter, so there are no figures for October.

BLAIR MEETS CABINET AFTER DEFEAT

Prime Minister Tony Blair would seek to get back to business as normal when he chairs a Cabinet meeting Thursday last.

Mr Blair says his authority is intact, despite his first Commons defeat, over a key part of his anti-terror plans.

But Tory leader Michael Howard says Mr Blair should resign, while Lib Dem leader Charles Kennedy warned Mr Blair could become a "lame duck" leader.

MPs, including 49 Labour rebels, voted down plans to detain terror suspects for up to 90 days without charge.

EXPERTS OUTLINE BIRD FLU STRATEGY

International health experts have agreed an outline global strategy to tackle bird flu.

The plan, which could cost $1bn (573m) over three years, focuses on fighting the lethal strain of the virus in birds and improving countries' preparedness.

Experts warned that it remained essential for countries to develop and rehearse plans to deal with a pandemic.

They also said developing vaccines and boosting production of anti-viral medicines could cost $500m.

Earlier this week, the World Bank said that a pandemic could cost the global economy $800bn.

UK BASE RATES 'TO STAY UNCHANGED'

The Bank of England's rate setting committee is expected to keep the cost of borrowing unchanged at 4.5% when it makes its announcement.

Only a few weeks ago analysts predicted a rate cut in November, but that was before figures showed inflation rose to an eight-year high in September. Inflation hit 2.5%, well above its 2.0% target, due to high oil prices.

BT PROFITS

Telecoms giant BT has unveiled a slight rise in profits for the first half of the year.

Pre-tax profits before one-off costs rose 3% to 1.13bn in the six months to September 30, compared to one year ago.

MIXED SALES FIGURES AT MITSUBISHI

Mitsubishi Motors has seen sales recover in Japan and Europe, but continue to decline in the US.

Releasing its results for the half-year to 30 September, the Japanese firm sold a total of 659,000 vehicles, an increase of 13,000 on a year earlier.

Mitsubishi's revenues for the half-year were 991.3bn yen ($8.4bn; 4.8bn), down from 1.07 trillion yen a year earlier.

Net losses totalled 63.8bn yen, compared to 178.8bn yen a year previously.

PHONES4U FOR SALE

The founder of UK mobile phone retail chain Phones4U has put the for sale sign up over his entire business.

Billionaire John Caudwell said he had taken the step after receiving "many offers" for all or part of the business from prospective buyers.

SUPPLY SWELL WEAKENS OIL PRICES

Oil prices have hit their lowest level for three months after US government figures showed larger than expected crude oil stockpiles.

US light crude oil was marked 78 cents lower at $58.93 a barrel, while London Brent crude fell 93 cents to $56.88.

Crude stocks rose by 4.5 million barrels last week, nearly three times more than expected.

Oil prices have dropped more than $11 since a record high of $70.85 reached at the end of August.

Petrol (gasoline) stocks in the US rose by 4.2 million barrels, far higher than the 1.2 million rise forecast.

CISCO SYSTEMS

Cisco Systems, the world's biggest maker of internet equipment, has posted a slightly lower quarterly profit due to the cost of expensing stock options.

Net income in the first quarter of its fiscal year was $1.3bn (745m), down from $1.4bn a year ago.

US BIDDER FOR DRAX POWER STATION

US electricity firm Constellation Energy has made a firm takeover bid for Drax, Britain's biggest power station.

Constellation says it has made a "realistic bid" for Drax after taking a look at the company's books.

Two other groups had made initial approaches valuing Drax at around 2bn, but neither followed up with a firm takeover offer.

TURKEY GRANTED EU MARKET STATUS

Turkey has been granted "market economy" status, a key hurdle on the road to full membership of the EU.

The status, a prerequisite for joining the EU, is expected to boost confidence in Turkey's economy among domestic and foreign investors.

The European Commission said Turkey must continue its economic reforms and abide by a pledge to open its borders to Cypriot trade. Turkey is expected to include Cyprus in a free trade deal it has with the EU.

FIRSTGROUP PROFITS

UK rail and bus operator FirstGroup has blamed increasing fuel costs for a dip in first-half profits.

Pre-tax profits for the six months to 30 September fell to 55.3m from 64.3m at the same time last year.

MITTAL PROFITS

Falling prices have hit profits at Mittal Steel, one of the world's largest steel producers.

An 11% fall in sales prices in July-September ate into operating income, which fell to $765m (440m) from $1.9bn in the same period of 2004.

INSURER RSA

A strong performance from Royal & Sun Alliance's (RSA) core businesses helped the insurer more than double profits in the nine months to September.

Operating profits at the group jumped to 488m from 241m, compared to the same period last year.

VIETNAM TO PRODUCE BIRD FLU DRUG

Vietnam says it is to become the first country to produce under licence the drug believed to be an effective treatment for bird flu.

It said it had agreed with Swiss firm Roche to start making generic supplies of Tamiflu early next year.

Vietnam has suffered most of the 63 human deaths from bird flu to date, the latest fatality occurring last month.

Roche said recently it would allow other firms to produce the drug to combat a potential flu pandemic.

US SEEKS INDIAN FINANCE REFORMS

US Treasury Secretary John Snow has asked India to consider opening its financial, insurance and pension fund sector to foreign investors.

Mr Snow, who is on a five-day visit to India, said opening of these sectors would provide funds to improve roads, railways, ports and power plants.

He met Indian business leaders and is scheduled to meet the PM and finance minister later in the week in Delhi.

BROWN 'MUST CUT PUBLIC SPENDING'

Employers' organisation the CBI has warned the chancellor that he must cut back on his public spending plans.

It says that the government needs to close a 10bn budget black hole in order to secure the public finances.

And it warns that further tax increases would be "extremely damaging" at a time when economic growth is slowing down.

But the Treasury says the government's spending plans are fully affordable. Mr Brown will publish his forecast in the Pre Budget Report later this month.

UK'S MANUFACTURING OUTPUT DROPS AGAIN

UK's Manufacturing output fell for the second month running in September, down 0.3%, the biggest drop since March.

However, on a three-monthly basis, output grew at a rate of 0.4%, according to the Office for National Statistics (ONS).

Industrial production was weaker than expected in September, due to maintenance work in certain oil fields dragging on into the month.

This left industrial output 0.5% higher instead of the expected 0.8% rise.

The three-monthly trend for industrial production also looks a bit more promising, with output now expected to drop at a rate of 1.5% instead of 3%.

 
 

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