News that Matters

London’s position as a global financial centre is under threat from the proposed merger of Deutsche Börse and NYSE Euronext as key investment decisions affecting the group’s UK businesses may shift abroad


The Confederation of British Industry has cut its forecast for UK economic growth, the WSJ reports, because it believes companies have lost confidence and curbed their activity in response to global shocks such as the eurozone debt crisis


Forcing companies to publish their greenhouse gas emissions – a pre-election promise by both coalition partners – could cost British business up to £6bn over the next decade, the government has claimed in an impact assessment study. But the FT reports that calculation has been questioned in a report by independent consultants working for the Aldersgate Group,


Greece and other stricken countries will have faster and easier access to tens of billions of euros in European Union funds under a plan to help stimulate their economies, the FT says. The plan, to be unveiled on Monday


China’s manufacturing sector growth eased slightly in July but showed signs of stabilising, the FT reports. The official purchasing managers’ index (PMI), designed to provide a snapshot of industrial conditions


A leading European hedge fund is preparing to build one of London’s most expensive housing developments as global investors scramble to gain a foothold in the capital’s resurgent residential market


Ahead of the opening of Asian markets, President Barack Obama announced on Sunday night that US Congressional leaders had reached an agreement on a tentative deal that would extend the debt ceiling and avoid a US default


Goldman Sachs has lost more than a dozen traders in North American bonds and derivatives as it switches from proprietary trading to client sales, Reuters says. The departures include Brian Mooney, a veteran interest rates derivative trader who has left for Merrill Lynch

European authorities should stop public bickering and speak with one voice to make the second rescue package for Greece work, warned Christine Lagarde, the new managing director of the International Monetary


The regime of Bashar al-Assad, the Syrian president, sent tanks into the rebel cities of Hama and Deir Ezzor on Sunday, killing more than 100 people across the country before the holy month of Ramadan, activists said. Barack Obama, US president, criticised Mr Assad’s use of “torture, corruption and terror”, saying he was appalled by the Syrian government’s brutality against its own people. He said the regime would be “left in the past”.
Asian shares rallied Monday as U.S. President Barack Obama confirmed a deal to raise the debt ceiling was in place, easing concerns of a possible credit downgrade or default, while the U.S. dollar pushed higher against the Japanese yen.  Japan's Nikkei Stock Average jumped 1.8%, Australia's S&P/ASX 200 climbed 1.9%, South Korea's Kospi Composite added 1.7% and New Zealand's NZX-50 was 0.4% higher. Dow Jones Industrial Average futures were quoted 182 points higher in screen trade.


The U.K. economy will grow significantly more slowly this year than previously thought, because companies have lost confidence and curbed their activity following a series of shocks around the world, a business lobby said Monday. The Confederation of British Industry cut its forecast for U.K. economic growth this year to 1.3% from the 1.7% that it predicted in May, citing the continuing sovereign-debt drama in the euro zone, the U.S. government's wrangling over its debt problems, and the March tsunami in Japan as factors that have weakened business sentiment and stifled growth.


Most European major oil companies posted a surge in quarterly profits last week, but their results were overshadowed by a trend that continues to trouble Wall Street and corporate boardrooms: Nearly every major oil company reported year-to-year oil-and-gas output declines, often in the double-digits. Big Oil is throwing huge resources at the problem with more open embrace of unconventional petroleum developments, high-risk exploration in frontier areas and corporate restructuring. But even if these strategies work in some cases, there is little doubt that anemic petroleum output signals a long-term challenge confronting the sector.
Australian manufacturing contracted in July, a survey out Monday complied by Australian Industry Group -- PwC showed. The performance of manufacturing index fell 9.5 points to 43.4 in July, falling below the 50-mark point that indicates contraction. Wood products and furniture was the weakest performing sub-sector of the survey and new orders fell 14.4 points to 40.2 in July. Difficulties facing manufacturing due to the high Australian dollar and sluggish domestic demand intensified in July, according to the survey.
Crude climbed more than $1 on Monday, sending Brent above $118, after U.S. President Barack Obama said congressional leaders agreed on a debt deal to avert default, improving the prospects for oil demand from the world's top consumer. Brent crude advanced $1.50 to $118.24 a barrel by 0416 GMT, rebounding from an almost two-week low hit in the previous session. Brent is less than $9 from this year's peak above $127, while U.S. crude gained $1.45 to $97.15.


Gold fell more than 1 percent on Monday, after President Barack Obama said a deal to reduce the country's deficit had been reached, dampening safe-haven interest that has propelled the precious metal to record highs in recent weeks. The most-active U.S. gold futures fell as much as 1.4 percent to $1,608.2, but recovered to $1,613.70 an ounce by 0126 GMT. Spot gold fell nearly 1 percent to $1,611.04, off a record high of $1,632.30 set on Friday.


Japan's finance minister kept up verbal intervention against a rising yen even as a weak dollar won a reprieve on Monday as U.S. lawmakers reached an agreement to raise the debt ceiling and avoid a sovereign default. Yoshihiko Noda said he continued to watch markets closely even though he welcomed the news from Washington, Jiji news agency reported. The government's chief spokesman also expressed relief over the agreement and hope that it would help stabilize markets.


The auto industry could lead an economic recovery in the United States, according to a recent survey by audit, tax and advisory firm KPMG. Auto executives plan to do more hiring and more capital spending than executives in any other sector in the next year, according to the survey. Sixty-two percent of auto executives said they expect to hire people in the coming year, compared with an average of only 52 percent of executives across all sectors. Similarly, 71 percent of autos executives said they expect to increase their capital spending in the coming year compared with an average of 59 percent of all executives.
South Korea’s inflation accelerated to a four-month high in July and exports grew at a quicker pace, putting pressure on the central bank to raise interest rates. Consumer prices rose 4.7 percent from a year earlier, Statistics Korea said today, exceeding the median estimate of a 4.4 percent rise in a Bloomberg News survey of seven economists. Exports expanded 27.3 percent last month, rebounding from a 20- month low and beating forecasts for a 17.1 percent gain, a separate report showed.


The House Republicans, many of them opposed to raising the federal government’s borrowing ceiling, might take a lesson from the first sovereign debt crisis: Spain’s default in 1575. What events more than 400 years ago suggest is that it’s easy to ignite a dangerous chain reaction in financial and credit markets and inflict lasting damage on the economy.  Republicans today are playing the part of the cities of Castile, whose delegates to the Cortes (the Spanish parliament) opposed raising taxes to service King Philip II’s long-term bonds.

U.S. auto sales have stalled, casting doubt on a rebound this year as persistent unemployment and tighter lending deter buyers.  Light-vehicle deliveries in July, to be released tomorrow, may have run at an 11.9 million seasonally adjusted annual rate, the average estimate of 12 analysts surveyed by Bloomberg. That would trail the 12.5 million rate in the first half.  The auto industry may lose 1.5 million in projected sales in 2011, according to consultant AlixPartners LLP. The


“There is no other country that can step in and replace the U.S. at the core of the system,” Mohamed El-Erian, the chief executive officer at Newport Beach, California-based Pacific Investment Management Co., which manages the world’s largest bond fund, said July 25 in an interview on Bloomberg Television. “The U.S. is the supplier of the reserve currency.”  The dollar represents 60.7 percent of the world’s currency reserves, compared with the 26.6 percent for the euro, which has the next biggest portion, according to the International Monetary Fund in Washington.
In addition to all the other ignominy heaped upon the US economy comes the latest insult Friday—confirmation of a “growth recession” that foretells a long, ugly road ahead. “Growth recession” is a term that means the economy actually is growing but not at a fast enough pace to head off rising unemployment, which is at 9.2 percent and trending higher. 

House Democrats may not support the budget deal that appears close in the Senate, according to Rep. Nancy Pelosi, the House Minority Leader said Sunday evening. "We all may not be able to support it or none of us may be able to support it," Pelosi told reporters at a brief press conference. Pelosi said she had not decided whether she would support the measure. Pelosi said she will meet with her caucus on Monday "to see how they wish to proceed."
China’s home prices rose at the slowest pace in 11 months in July after the government expanded efforts to curb the risk of an asset bubble, according to SouFun Holdings Ltd. Home prices gained 0.2 percent in July from June, the slowest since August last year. Residential prices increased in 66 out of 100 cities tracked by the nation’s biggest real-estate website owner, with average home values nationwide climbing to 8,874 yuan ($1,378) a square meter (10.76 square feet), SouFun said on its website today.
Iran and India have resolved a payment dispute that was threatening to halt the Islamic state's crude exports to India. The National Iranian Oil Company said the two sides had agreed to settle the bill as soon as possible, state news agencies said. Iran had threatened to cut off supplies to India if payments were not made by 1 August. US sanctions on Iran make it difficult to send international bank payments.


US economic growth is much weaker than first thought, government figures show. The economy grew at an annualised rate of 1.3% in the second quarter, the Commerce Department said. Economists had forecast growth of 1.8%. And in a surprise move, first-quarter growth was revised down sharply from 1.9% to 0.4%.


Eurozone inflation unexpectedly slowed in July to 2.5%, raising questions about when the European Central Bank (ECB) might raise interest rates again. The preliminary estimate is down from 2.7% in June, according to the European Union statistics office Eurostat. The July reading comes as a surprise after data earlier this week suggested inflation in Germany, Europe's largest economy, edged up to 2.4%. The ECB has raised rates twice so far this year to try to control inflation.
According to research by Haver Analytics, real disposable income is shrinking at a rate of about 3pc in the UK, but is contracting by just 0.5pc in the eurozone and continues to rise by 2pc in the US. The main squeeze on households has come from rising prices for food and energy, uniform across the world, but the weak pound has exacerbated the problem in the UK.


Profits at the investment banking arms of Britain's largest banks are forecast to have fallen by £2bn in the first half of the year as the businesses were hit by a combination of deteriorating market conditions and higher funding costs.


If interest rates had been raised enough to keep price rises down to the official 2pc target, the UK would have seen no recovery at all from the recession, Fathom Consulting argues. Instead, the economy would have showed zero growth. In addition, the knock-on impact of higher borrowing costs on debt-laden households would have meant the economy contracting both this year and last – creating a slump to rival the one seen in the 1930s.
Big ticket banking takeovers will not return for another two years at least, as global financial groups continue to feel the pressure in the wake of the downturn, according to a report out today. Mergers and acquisitions in the banking sector will be dominated by second-tier consolidation, accountancy group KPMG said, as regulation "chokes off" large Western banks' abilities to target larger deals. The report, Bruised But Not Broken, found that global banking M&A activity will be locally focused as the regulatory trends such as Basel III – and the current weakness in the financial markets – play out over the next five years.
THE Reserve Bank has been warned that an interest rate rise would have serious consequences for the NSW economy as a new survey shows business conditions have slumped to levels not seen since the global financial crisis. Almost 50 per cent of firms have had a fall in profit since the end of March, the latest NSW Business Chamber and Commonwealth Bank business conditions survey shows. Measures of sales, employment, hours worked, investment and business confidence have all weakened.


New home sales posted their biggest monthly fall in five years in June, amid weakening confidence in the economy and worries about higher interest rates. New house sales dropped sank 17 per cent in flood-disrupted Queensland and 10 per cent in Victoria. New South Wales saw a more modest drop of 1.8 per cent for the month. Nationwide, new home sales slumped 8.7 per cent, seasonally adjusted, in June to about 8000 deals, according to the Housing Industry Association - JELD-WEN. June's drop was the steepest monthly decline since May 2006 and followed a 0.2 per cent slip in May.
The Free Trade Agreement (FTA) between Costa Rica and China, the first such pact inked between China and a Central American country, will enter into force on Aug. 1, Foreign Trade Minister Anabel Gonzalez said Friday. Both sides have completed the necessary procedures exchanged all the diplomatic notes, the Foreign Trade Ministry said in a statement.
China will continue to face tight power supply in the second half of this year due to steadily rising demand and the uneven spread of power generation throughout the country, according to an industry report released by the China Electricity Council (CEC) Friday. China is expected to see summer energy use peak in August, which will impose greater pressure on the country's already tight power supply. A previous electricity shortfall has eased to some extent since June, partly because of increased levels of hydropower coming on line because of abundant rainfall in major areas, said Jia Fusheng, a senior official at the Bureau of Economic Operations Adjustment under the National Development and Reform Commission (NDRC).
Amid concerns raised by Prime MinisterManmohan Singh on highways deficit in the country, the government is looking at an investment of over Rs 2.64 lakh crore in the road sector in the next five years, over 65% of which will come from the private sector.
South Korea logged a trade deficit with the European Union last month as imports spiked from the region after both implemented a free trade deal, customs data showed Monday. The free trade agreement (FTA) between South Korea and the EU went into effect on July 1. Under the deal, both sides will eliminate or phase out tariffs on 96 percent of EU goods and 99 percent of South Korean goods within three years after the accord takes effect.
TEHRAN — Trade between Iran and the EU reached 9.5 billion euros in the first five months of 2011, the statistical office of the European Union (Eurostat) reported.  Despite the U.S. and the EU sanctions, Iran’s exports to the EU’s 27 member states in the first five months of 2011 rose 6.4% compared to the same period of the last year, reaching from 5.028 billion euros to 5.35 billion euros, the report said.  EU’s exports to Iran decreased around 7.1% in the first five months of 2011 compared to the same period the year before, reaching 4.1b euros, Eurostat added.