'REMARKABLE' UK ECONOMY PRAISED
The International Monetary Fund (IMF)
has praised the "remarkable" stability of the UK economy, despite a
housing market slowdown and rising fuel prices.
The IMF also forecast economic growth
would pick up in 2006 and 2007 - to 2.25% and 2.75% respectively - as the UK
shook off the current "soft patch".
"Macroeconomic stability in the UK
remains remarkable," its report said.
But, it did warn that the Chancellor
needs to rein in spending to stop budget deficits widening further.
The Article IV report also questioned
Gordon Brown's decision to restate the current economic cycle.
"Fiscal rules are playing an
important role in disciplining fiscal policy, although at times this role is
overshadowed by peripheral controversies," the report said.
It added that Mr Brown's success in
sticking to his golden rule - of borrowing only to invest during the economic
cycle - depended on "a precise dating" of the cycle.
"The adjustments in the definition
of the cycle have proved an unhelpful distraction from the more important
considerations of what a sustainable fiscal policy is," the IMF said.
In July, Mr Brown declared the current
economic cycle began in 1997 rather than 1999 - a move some experts said was
effectively moving the goalposts for his own rules.
They swooped on the change, accusing Mr
Brown of "cheating" to avoid breaching another strand of the golden
rule, namely on balancing the budget over the economic cycle.
US SENATE BLOCKS ALASKA OIL DRILLING
The US Senate has narrowly blocked a
Republican-led attempt to allow drilling for oil in Alaska's Arctic National
Wildlife Refuge (ANWR).
Supporters of the plan fell four votes
short of the number needed to prevent opponents using a filibuster - or delaying
tactic - to derail the vote.
The Republicans had hoped to win Senate
support by tacking the Alaska measure on to a major defence spending bill.
Both sets of legislation are likely to
be presented again separately.
Supporters of drilling in Alaska say it
offers an alternative source of energy to the Middle East and so would improve
Opponents warn oil exploration would
harm a pristine wilderness and endanger a key habitat for migratory birds, polar
bears, caribou and other animals.
The Republicans fell short of the 60
votes needed to avoid the Democrat-led filibuster, with the tally standing at
Alaska's Arctic National Wildlife
Refuge covers 19 million acres
Senate leaders are expected to withdraw
the defence spending bill to redraw it without the Alaska drilling provision.
Senate Majority Leader Bill Frist was
among those to vote 'No' because, under Senate rules, as a member of the
majority he would be allowed to bring up the drilling issue for another vote.
Alaska Republican Ted Stevens had
attached the measure to the defence spending bill - an essential piece of
legislation - in the hope it would be passed.
EUROZONE GROWTH GAINS MOMENTUM
Eurozone growth is gaining momentum as
business investment booms, although private consumption remains hesitant, the
European Commission(EU) said.
The eurozone economy grew 0.6 per cent
in the third quarter of this year after growth of 0.4 per cent in the second
quarter, the EU's executive arm predicted in its quarterly report on the bloc,
without offering a forecast for the fourth quarter.
In the third quarter, the commission
saw the eurozone economy expanding on an annual basis at a rate above the bloc's
estimated potential growth rate of about two per cent.
Looking ahead, the commission stuck to
previous estimates for growth this year of 1.3 per cent and 1.9 per cent next
year. "The gross domestic product (GDP) growth in the euro area accelerated
to rates above potential in the third quarter of 2005, and leading indicators
suggest that economic activity remained sustained during the last months of
2005," the commission said.
GULF STATES RATIFY FOREX UNION CRITERIA
Gulf Arab leaders endorsed criteria for
European-style monetary union in the world's biggest oil exporting region and
agreed to forge a common policy on negotiating trade agreements.
But they did not announce any decision
on how and when the six Gulf Cooperation Council (GCC) states would start moving
toward a single currency.
The leaders endorsed the monetary and
financial criteria (that will lead to) the success of monetary union, a summit
Bureaucrats of the United Arab
Emirates, Saudi Arabia, Oman Qatar, Bahrain, and Kuwait have agreed five
macro-economic and budgetary criteria for monetary union by 2010.
The criteria cap budget deficits at 3
per cent of gross domestic product, public debt at 60 per cent of GDP, inflation
at the GCC average plus 2 per cent and interest rates at the average of the
lowest three states plus 2 per cent and require foreign exchange reserves to
cover 4-6 months of imports.
FDI RISES BY 328PC IN 6 MONTHS IN BD
The inflow of foreign direct investment
into Bangladesh in the first six months of the current calendar year has
increased by 328 per cent, compared to the corresponding period of the previous
year, statistics released by the Bangladesh Bank ? the central bank of the
Bangladesh attracted foreign investment
of $453.7 million till June 30, this year, compared to $138.3 million in the
first six months of 2004, bringing the total amount of foreign direct investment
to $460.4 million during the year.
The data compiled in the latest survey
conducted by the Bangladesh Bank showed that the inflow of foreign investment
included equity capital of $247.3 million, reinvestment earnings of $140.8
million and intra-company loans of $65.6 million.
The Board of Investment intends to
increase the inflow of foreign direct investment to about $800 million in 2005.
The country received foreign direct
investment amounting to $79 million in 2001, $52 million in 2002, $268 million
in 2003 and $460 million in 2004, showing a higher growth in foreign investment
in recent years.
EU QUOTAS BRING MODEST FISH CUTS
The European Union has agreed new
fishing quotas for 2006, after three days of negotiations in Brussels.
The number of days cod trawlers can
spend at sea will be cut by 5% - instead of the 15% recommended by the European
Scientists had called for a blanket ban
on cod fishing due to low stocks, but this was opposed by fishing fleets.
France won the right to fish anchovies
in the Bay of Biscay after the lifting of an outright ban.
The deal, reached after what was
described by the French as a "difficult meeting", appeared to have
general backing among the 25 EU states. There were no votes against, with just
OPEC AND CHINA FORGE CLOSER TIES
Opec officials have arrived in Beijing
for the first formal talks between the oil producing cartel and China.
Chinese leaders are keen to secure
supplies of oil to fuel the country's rapidly expanding economy.
Opec, meanwhile, wants to develop
closer ties with the world's second-largest oil consumer.
With world oil supplies currently
stretched, Opec says it wants to gain a better understanding of China's appetite
Oil producing nations are facing an
investment bill for billions of dollars to ramp-up production at oilfields in a
bid to meet soaring demand.
HILTON CONFIRMS LADBROKES SUITORS
UK leisure firm Hilton Group has
confirmed it has been approached about selling its Ladbrokes business.
According to media reports, a number of
private equity groups have expressed an interest, valuing the gambling company
at £3-4bn ($5.2-7bn).
Hilton Group said it remained focused
on concluding the sale of its international hotels chain to US namesake Hilton
EUROFIGHTER SOLD TO SAUDI ARABIA
Shares in BAE Systems have risen over
6% in value after the UK government agreed to supply Saudi Arabia with the new
This is the first contract for the jet
outside Europe and will safeguard thousands of UK jobs.
The Eurofighter has been developed by a
consortium of firms in the UK, Germany, Spain and Italy.
IMF BACKS POVERTY DEBT WRITE-OFF
The International Monetary Fund (IMF)
has agreed to write off the $3.3bn (£1.89bn) owed to it by all but one of the
20 poorest countries in the world.
It has delayed granting debt relief to
Mauritania until it makes "satisfactory progress in a few policy
The write-off follows the Group of
Eight debt forgiveness deal which was struck in July.
RAPID US ECONOMIC GROWTH PERSISTS
The US economy has continued to grow
quickly despite the impact of hurricanes and record high oil prices.
The Department of Commerce said that
gross domestic product (GDP) increased by an annual rate of 4.1% in the three
months to the end of September.
That was the fastest rate of growth
since the first quarter of 2004, and up from 3.3% in the previous three months.
Consumer demand - which has been helped
by discounting - was the key driver, along with business investment.
Consumer spending, which accounts for
nigh on two-thirds of economic activity, increased by more than 4% during the
third quarter, up from 3.4% in the previous three month period.
On the negative side, growth in the
third quarter was less than had been initially predicted and corporate earnings
slid as companies had to meet the cost of hurricanes Rita and Katrina.
GOOGLE CONFIRMS $1BN STAKE IN AOL
Online search engine Google has
confirmed it will invest $1bn to take a 5% stake in Time Warner's AOL unit as
part of a major strategic alliance.
The deal, which follows intense
negotiations between the two US internet giants, values the troubled AOL unit at
NIKE PROFIT RISES
US sportswear group Nike has announced
a 15% rise in profits, a record for its second quarter, beating Wall Street
The firm, which also owns the Nike Golf
and Converse brands, said profits rose to $301m (£171m) on strong sales in the
US of its upmarket athletic footwear.
UK CUTS UGANDA AID IN POLL FEARS
Britain is to cut the amount of direct
aid it gives to Uganda by £15m ($26m) because of concerns about the country's
slow progress to democracy.
The money will be diverted to aid
agencies in the conflict zone of north Uganda, International Development
Secretary, Hilary Benn said.
A further £4m is being held back
pending the conduct of presidential elections due in February next year.
The announcement follows a similar move
by Sweden, which diverted £4.6m.
European governments have expressed
concern about the prospects for a fair election following the arrest on treason
charges of the main opposition leader, Kizza Besigye.
COSTLIEST YEAR YET FOR INSURERS
Insurers had their costliest year yet
in 2005 as a deluge of natural disasters saw total insured losses of about $80bn
(£45bn), says Swiss Re.
August's Hurricane Katrina in the US
alone is expected to cost $45bn in claims, the world's second-biggest
reinsurance company said.
This will make it the most expensive
ever insured single event.
Total economic losses caused by
hurricanes, earthquakes and floods in 2005 reached $225bn in 2005, it said.
Hurricane Andrew in 1992 was previously
the most expensive single catastrophe, causing losses of $22bn, Swiss Re said.
This was followed by the 11 September
2001 attacks on the US, costing nearly $21bn.
Two other expensive storms in the US
came in the wake of Katrina. Hurricane Rita cost $10bn in insured losses and
Wilma claimed $8bn.
UKRAINE REJECTS RUSSIA GAS THREAT
Ukraine's president Viktor Yushchenko
has dismissed threats by Russia's gas monopoly Gazprom to cut off its gas
supplies unless new prices are agreed.
Mr Yushchenko was speaking a day after
talks between the Russian and Ukrainian premiers failed to resolve the stand-off
over gas prices.
Moscow wants to raise the price of gas
for Ukraine to bring it in line with world market rates.
But Mr Yushchenko said the threats to
end supplies amounted to "blackmail".
Currently Ukraine receives heavily
discounted gas from Russia, offsetting the price against fees levied for
transporting Russian gas through its pipelines.
Gazprom says it will not compromise
over its demand that Ukraine pays what it says are appropriate rates.
Moscow wants to more than quadruple the
price of supplies to the Ukrainian market, to between $220 and $230 per 1,000