Economy News Headlines - Yahoo! News UK

Asian stocks steadier, Nikkei bounces back

Fri, 24 May 2013 01:30:32 +0100

By Ian Chua SYDNEY (Reuters) - Asian shares opened cautiously higher on Friday with Tokyo's Nikkei steadying from its biggest one-day drop in two years as investors breathed a sigh of relief when Wall Street cut losses on an upbeat outlook from Hewlett-Packard. As some semblance of calm returned to markets, the yen drifted lower against the dollar and euro, giving back some of the chunky gains made on Thursday. MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.2 percent, having slumped more than 2 percent on Thursday in its largest one-day decline in 10 months. ...

Japan economics minister - 'Abenomics' proceeding smoothly

Fri, 24 May 2013 01:23:52 +0100

TOKYO (Reuters) - Japan's "Abenomics" economic policies are proceeding smoothly with the government determined to map out its growth strategy by midyear, Economics Minister Akira Amari said on Friday. "The government is steadily making progress with steps to revive Japan's economy. I don't see any problems there and things are going smoothly," Amari told a news conference after a cabinet meeting. He declined to say whether Thursday's sharp fall in share prices was a temporary move. Amari also said Bank of Japan Governor Haruhiko Kuroda was communicating well with markets to soothe volatility. ...

Draghi says euro zone more stable, "needs a more European UK"

Fri, 24 May 2013 01:09:35 +0100

By David Milliken and Marc Jones LONDON (Reuters) - The euro zone is more stable than a year ago but economic conditions remain challenging and governments must push on with reforms and banking union plans, European Central Bank President Mario Draghi said on Thursday. Speaking in London almost a year after he vowed to do "whatever it takes" to save the euro, Draghi said European countries should strengthen their ties and flesh out plans made last June for closer integration, including a banking union. ...

Sushi's Abenomics wave: posh tuna in, plain mackerel out

Thu, 23 May 2013 22:09:35 +0100

By Taiga Uranaka TOKYO (Reuters) - Investors in Japan might keep a close eye on sales of the homely horse mackerel as an early warning of any trouble ahead. The good news is that in the more confident Japan of 2013, tuna remains king. So says Mizuho Securities economist Kenta Ishizu, who believes he has found a leading indicator of Japanese consumer demand that relies on two of the most common items on a sushi menu: Japanese horse mackerel and tuna. ...

France says dropping idea of cap on executive pay

Thu, 23 May 2013 21:57:12 +0100

PARIS (Reuters) - The French government has decided to drop a plan to impose a ceiling on executive pay in the private sector, though it will go ahead with a two-year super-tax on firms paying million-euro salaries, Finance Minister Pierre Moscovici said. Moscovici told the daily Les Echos in an interview that the year-old Socialist government wanted to support business and job creation, and was working to accelerate the take-up of tax credits aimed at lowering companies' labour costs. ...

ECB can't solve euro zone crisis alone - Weidmann

Thu, 23 May 2013 21:35:18 +0100

By Ingrid Melander PARIS (Reuters) - Bundesbank chief Jens Weidmann said on Thursday it was not up to the European Central Bank to solve the euro zone crisis, resisting pressure from other ECB policymakers for the bank to widen its range of policy tools. Speaking in Paris, Weidmann declined to comment on U.S. Federal Reserve chairman Ben Bernanke's remarks that the U.S. central bank may start to trim its bond purchases at one of its next policy meetings. ...

ECB needs solid euro zone public finances to do its job - Weidmann

Thu, 23 May 2013 20:07:07 +0100

PARIS (Reuters) - Bundesbank chief Jens Weidmann said on Thursday that euro zone states needed to ensure they had solid public finances in order for the European Central Bank to be able to do its job. "We need solid public finances to protect the ECB, to allow us to do our job," Weidmann told a conference in Paris, adding that insolvency must still be an option for countries unable to repay debt. Weidmann also said that it could not be a policy goal to have equal interest rates for businesses across the bloc. (Reporting by Ingrid Melander; Editing by Catherine Bremer)

Global Markets Down After Bernanke QE Talk

Thu, 23 May 2013 19:40:20 +0100

The FTSE lost close to 2% in early trading on the back of signs the US may wind down quantitative easing measures and weak Chinese data.

Fed officials stress no rush to exit, not on 'autopilot'

Thu, 23 May 2013 19:25:08 +0100

(Reuters) - The Federal Reserve will not hastily withdraw its policy stimulus for the U.S. economy, a senior U.S. central banker said on Thursday, while another stressed that it could adjust the pace of bond purchases both up or down according to the data. Seeking to temper investor concerns that the Fed was quickly moving to end its ultra-easy monetary policy, St. Louis Fed President James Bullard said in London that he did not think the Fed was "that close" to taking any such decision. ...

French jobless fund sees unemployment rise in 2013-2014

Thu, 23 May 2013 18:13:02 +0100

PARIS (Reuters) - The number of jobless will continue to rise in France through 2014, the country's unemployment benefit fund said on Thursday, contradicting President Francois Hollande's pledge to stem job losses by year-end. The UNEDIC fund projects the rising number of jobless means it will finish this year 4.8 billion euros ($6.2 billion) in deficit, versus 2.7 billion euros in 2012, as a shallow recession hits home in Europe's second-largest economy. Rising unemployment and the fund's deficit are making Hollande's efforts to put public finances back on track more difficult. ...

Portugal rolls out tax incentive to boost investment

Thu, 23 May 2013 18:00:39 +0100

LISBON (Reuters) - Portugal rolled out a new fiscal incentive for companies on Thursday, saying it will allow a 20 percent tax deduction on investments of up to 5 million euros to help drag the bailed-out economy out of a deep recession. Finance Minister Vitor Gaspar said the fiscal credit measure was an "innovative and unprecedented" move that will serve as catalyst for economic growth and jobs creation, adding that the recovery should begin in the second half of the year. "The moment for investment has come," Gaspar told a briefing. ...

Euro zone slump eases in May but points to contraction in second quarter - PMI

Thu, 23 May 2013 18:00:39 +0100

By Andy Bruce LONDON (Reuters) - The downturn across euro zone businesses eased slightly this month, although a dearth of new orders means the bloc's economy is likely to contract again in the second quarter, business surveys showed on Thursday. Markit's flash Euro zone Services PMI, which surveys around 2,000 companies ranging from major banks to caterers, rose in May to 47.5, a three-month high, from 47.0 in April. While that was a little better than economists polled by Reuters expected, the PMI has now spent 16 straight months below the 50 mark that divides growth and contraction. ...

U.S. jobs, housing data show economy has some muscle

Thu, 23 May 2013 17:55:11 +0100

By Lucia Mutikani WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits fell last week, pointing to resilience in the labor market despite belt-tightening by Washington. The improving employment picture is helping to prop up housing, with rising home prices keeping domestic consumption supported, limiting the drag from tighter fiscal policy that is dampening factory activity. "All the eggs are in housing and the consumers' baskets this quarter. ...

Euro zone consumer confidence inches up in May

Thu, 23 May 2013 17:44:56 +0100

BRUSSELS (Reuters) - Consumer morale in the euro zone edged up broadly in line with expectations in May, showing its sixth monthly improvement in a row, European Commission data showed, though the indicator remained well below the currency area's long-term average. The Commission said consumer confidence in the 17-member euro zone rose to -21.9 this month from an April figure of -22.3. Economists polled by Reuters had forecast a rise to -21.8. ...

German trade chamber cuts growth forecast, private sector shrinks

Thu, 23 May 2013 17:44:56 +0100

BERLIN (Reuters) - Germany's DIHK Chambers of Commerce cut their growth forecast for this year on Thursday as the country's private sector cut jobs, suggesting Europe's biggest economy may recover more slowly than hoped. The DIHK scaled back its prediction to 0.3 percent from 0.7 percent, citing concerns that exports will pick up less strongly than expected. It said companies expected an improved economic climate in coming months after a weak first quarter, but that time was needed for reforms in the ailing euro zone to have a positive impact. ...

Berlin hopes efforts on youth jobs will help its image in Europe

Thu, 23 May 2013 17:44:56 +0100

By Annika Breidthardt BERLIN (Reuters) - German alarm that their country is blamed for austerity measures compounding the problems in the euro zone helps explain Berlin's bilateral efforts to tackle youth unemployment in some of the countries worst affected. That image problem needs addressing in part because Germany needs to attract foreign workers to make good shortages at home, while the bilateral nature of the initiatives is a measure of its leaders' frustration at the slow pace of the European Commission in taking action to deal with soaring joblessness among the young. ...

U.S., China factories struggle; Fed hints at less stimulus

Thu, 23 May 2013 17:24:37 +0100

By Andy Bruce and Steven C. Johnson LONDON/NEW YORK (Reuters) - Chinese factory activity declined in May for the first time in seven months and U.S. manufacturing grew at its slowest pace since October, suggesting it may take a while before the global economy starts to pick up steam. Thursday's downbeat business surveys from the world's two largest economies came a day after Federal Reserve Chairman Ben Bernanke spooked markets by hinting that the U.S. central bank could soon scale back monthly bond purchases, provided the economy maintained its recent momentum. ...

U.S. urges Europe to act to avert prolonged stagnation

Thu, 23 May 2013 17:04:47 +0100

By Jason Lange WASHINGTON (Reuters) - The United States on Thursday called on Europe to act decisively to boost its economy and counter the risk of a protracted stagnation that would undermine economic growth in America. "Decisive action is needed now to restart demand and avoid the risk of protracted stagnation," U.S. Treasury Undersecretary Lael Brainard told lawmakers. Europe is locked in a grinding recession that in some corners of the continent increasingly looks like a depression. Unemployment in the 17 nations that use the euro hit a record high in March at 12.2 percent. ...

IMF's Lagarde in court for French arbitration case

Thu, 23 May 2013 17:04:14 +0100

By Chine Labbé PARIS (Reuters) - IMF chief Christine Lagarde was questioned in court by French magistrates on Thursday over her role in a 285-million-euro ($366 million) arbitration payment made to a supporter of former president Nicolas Sarkozy. Lagarde risks being placed under formal investigation at the hearing for her 2007 decision as Sarkozy's finance minister to use arbitration to settle a long-running court battle between the state and high-profile businessman Bernard Tapie. ...

FTSE suffers worst day in a year on stimulus taper worries

Thu, 23 May 2013 17:03:20 +0100

By Toni Vorobyova LONDON (Reuters) - The FTSE 100 share index suffered its biggest one-day drop in a year on Thursday, knocked off historic peaks by weak economic data and signs the U.S. Federal Reserve could soon taper its stimulus programme. Fed chairman Ben Bernanke said late on Wednesday the central bank could scale back quantitative easing in coming months if economic momentum was maintained, thus threatening the removal of the stimulus which has been a key driver of the year-long equity market rally. ...

U.S. urges action from Europe to avert prolonged stagnation

Thu, 23 May 2013 15:46:54 +0100

WASHINGTON (Reuters) - The United States on Thursday called on Europe to act decisively to boost its economy and counter the risk of a protracted stagnation that would undermine economic growth in America. "Decisive action is needed now to restart demand and avoid the risk of protracted stagnation," U.S. Treasury Under Secretary Lael Brainard told U.S. lawmakers. Speaking for the administration of President Barack Obama, Brainard said Europe should rethink a broad push toward fiscal austerity, saying some countries should be given more time to get their budgets in order. ...

Exclusive: China urbanisation plan hits roadblock over spending fears - sources

Thu, 23 May 2013 14:28:24 +0100

By Kevin Yao BEIJING (Reuters) - China's plan to spend $6.5 trillion (4.31 trillion pounds) on urbanisation to bolster the economy is running into snags, sources close to the government said, as top leaders fear another spending binge could push up local debt levels and inflate a property bubble. Premier Li Keqiang has rejected an urbanisation proposal drafted by the National Development and Reform Commission (NDRC), seeking changes to put more emphasis on economic reform, according to the sources, who are familiar with the matter. ...

UK inflation expectations at 10-month low - Citi/YouGov

Thu, 23 May 2013 13:44:15 +0100

LONDON (Reuters) - Britons expect inflation of 2.5 percent over the coming year, the lowest rate since the one they predicted in July last year, a YouGov/Citi survey showed on Thursday. Consumer price inflation has been above the central bank's 2 percent target for much of the past five years, but eased last month to 2.4 percent and looks set to fall further over the coming two years. "These results should reassure the Monetary Policy Committe, who continue to worry that the long period of above-target inflation will destabilise inflation expectations," said Citi economist Michael Saunders. ...

ECB seeks new tools while Fed toys with exit

Thu, 23 May 2013 12:55:04 +0100

By Leigh Thomas and Jason Lange PARIS/WASHINGTON (Reuters) - The European Central Bank is looking into expanding its range of policy tools, while the U.S. central bank is mulling scaling back its support measures, highlighting the contrasting fortunes between the world's two biggest economic blocs. ECB Executive Board member Peter Praet said late on Wednesday that the central bank could try new policies if needed to battle deflation risks, adding that the central bank was also weighing measures to encourage more lending in the euro zone. ...

Signs of weakness mar UK economic growth

Thu, 23 May 2013 12:17:45 +0100

By Olesya Dmitracova and William Schomberg LONDON (Reuters) - Britain's better-than-expected economic growth in the first quarter turns out to have been boosted by a rise in inventories, while consumer spending was weak and investment fell, raising questions whether the nascent recovery will last. Britain avoided falling back into recession when official data, first released in April, showed its economy grew 0.3 percent between January and March from the previous quarter. The Office for National Statistics confirmed the headline number on Thursday and said growth was 0. ...

Russia's commitment to new budget rule already in doubt

Thu, 23 May 2013 12:16:17 +0100

By Maya Dyakina MOSCOW (Reuters) - Just last year Russia's government reimposed a rule meant to restrain spending and borrowing and channel substantial amounts of the country's energy revenues into its wealth fund. But the economy is weakening and budget discipline is already slipping. Finance Minister Anton Siluanov's inability to hold the line, in contrast to his predecessor Alexei Kudrin, does not spell immediate disaster for Russia, which is running a small fiscal deficit and has minimal debts. ...

Warning signs for China, Fed hints at curbing stimulus

Thu, 23 May 2013 11:44:04 +0100

By Andy Bruce LONDON (Reuters) - Chinese factory activity shrank in May for the first time in seven months, overshadowing signs that the euro zone's downturn tempered slightly in May, business surveys showed on Thursday. World stock markets tumbled after the Chinese data and also in response to U.S. Federal Reserve Chairman Ben Bernanke, who hinted on Wednesday the Fed could soon pare back its bond-buying with new money if the economy maintains momentum. China's flash HSBC Purchasing Managers' Index (PMI) entrenched fears recovery in the world's No. ...

Spain's borrowing costs rise for first time in 4 months

Thu, 23 May 2013 11:03:17 +0100

MADRID (Reuters) - Spain paid higher rates on medium-term debt for the first time since early February, at an auction on Thursday, a sign that a global liquidity flows into countries on the periphery of the euro zone could be drying up. Spain sold 4 billion euros ($5.15 billion) at a triple-bond sale, meeting its issuance target, and yields rose on bonds maturing in three, five and 13 years. ...

ECB considering measures to tackle financial fragmentation - Noyer

Thu, 23 May 2013 08:45:04 +0100

PARIS (Reuters) - Financial fragmentation persists in the euro zone and the European Central Bank is considering additional monetary actions to tackle the problem, ECB governing council member Christian Noyer said on Thursday. "The current degree of financial fragmentation in the euro area remains an obstacle to the smooth transmission of our monetary policy," Noyer told a conference in Paris. "Hence we are currently considering the possible introduction of additional monetary instruments that could further reduce financial fragmentation. ...

Business slump in May leaves France mired in recession - PMI

Thu, 23 May 2013 08:32:38 +0100

PARIS (Reuters) - French business activity retreated again in May despite a slight improvement in manufacturing, a survey showed on Thursday, offering little hope of a quick exit from recession in the euro zone's second-biggest economy. Data compiler Markit said its preliminary composite purchasing managers index, covering activity in the services and manufacturing sectors, was unchanged in May at 44.3, far below the 50-point line dividing expansions in activity from contractions. ...

EU may give Greece more time to meet fiscal targets - Dijsselbloem

Thu, 23 May 2013 08:21:02 +0100

ATHENS (Reuters) - The euro zone may give Greece more time to meet fiscal targets agreed under its international bailout, the chairman of the euro zone finance ministers said in an interview published on Thursday. "The Commission's approach regarding fiscal consolidation is more flexible, giving certain countries more time to meet their targets. I believe that this will be the case for Greece if needed," Jeroen Dijsselbloem told Kathimerini newspaper. ...

Pennon profit plunges on waste-related write-down

Thu, 23 May 2013 08:10:43 +0100

PARIS (Reuters) - British water and waste firm Pennon's full-year profit plunged to 26.9 million pounds from 172.2 million pounds in the previous financial year due to a 150 million pound exceptional charge related to its struggling waste business. Pennon's waste division Viridor is suffering as the economic crisis depresses prices for recycled waste. Total revenue was down 2.6 percent to 1.2 billion pounds. Pennon, which was demoted from the UK's top FTSE 100 index to the mid-cap FTSE 250 index in December, will pay a total dividend for the year of 28.46 pence, an increase of 7.3 percent. ...

Bernanke says more progress needed before stimulus pullback

Wed, 22 May 2013 22:39:52 +0100

By Pedro da Costa and Alister Bull WASHINGTON (Reuters) - The Federal Reserve's monetary stimulus is helping the U.S. economy recover but the central bank needs to see further signs of traction before taking its foot off the gas pedal, Fed Chairman Ben Bernanke said on Wednesday. A decision to scale back the $85 billion (56 billion pounds) in bonds the Fed is buying each month could come at one of the central bank's "next few meetings" if the economy looked set to maintain momentum, Bernanke told Congress. ...

IMF urges UK to spend more to fund investment

Wed, 22 May 2013 22:13:45 +0100

By William Schomberg and David Milliken LONDON (Reuters) - Britain's government should spend more now to fund investment and steer its economy back to recovery, the International Monetary Fund said on Wednesday, a call unlikely to be heeded by Chancellor George Osborne. Economic data earlier on Wednesday highlighted the challenge facing Osborne. Retail sales slumped last month while a measure of public borrowing jumped to a record high. ...

ECB can expand its tools to fight crisis - board member

Wed, 22 May 2013 22:08:42 +0100

By Jason Lange WASHINGTON (Reuters) - The European Central Bank could expand its policy toolkit if needed to battle deflation risks, a top ECB official said on Wednesday, adding that the central bank was also weighing measures to encourage more lending in the euro zone. Peter Praet, a member of the ECB's executive board, said a deflationary spiral must be avoided in the crisis-stricken currency block and that deleveraging by the region's banks could hurt economic growth and push the inflation rate too low. ...

ECB's Praet calls for caution on bank deleveraging

Wed, 22 May 2013 19:57:01 +0100

WASHINGTON (Reuters) - The European Central Bank must be careful that deleveraging by euro zone banks does not affect the economy such that inflation drops too low, ECB Executive Board member Peter Praet said on Wednesday. "We have to be very attentive that the balance sheet adjustment doesn't lead to macro conditions that will put pressure on the downside of price stability," Praet, who is in charge of the economics portfolio on the ECB's six-member executive board, told a conference in Washington. (Reporting by Jason Lange)

Germany takes bilateral paths to tackle EU jobs crisis

Wed, 22 May 2013 19:54:43 +0100

By Annika Breidthardt BERLIN (Reuters) - Germany is banking on bilateral deals to fight record youth unemployment in the euro zone, agreeing to cooperate with several countries to bypass pan-European bureaucracy. On Wednesday, Finance Minister Wolfgang Schaeuble and Portugal's Vitor Gaspar said Germany's state development bank KfW would help set up a Portuguese financial development institution and would "provide technical as well as financial support". ...

FTSE sets new 13 year high on Bernanke testimony

Wed, 22 May 2013 17:07:46 +0100

By Alistair Smout LONDON (Reuters) - Growth sensitive sectors drove FTSE 100 to fresh 13 year highs, receiving a boost after the top U.S. central banker reaffirmed his commitment to continued stimulus. Federal Reserve chairman Ben Bernanke said that central bank needs to see further signs of traction before taking its foot off the gas, helping to spike the FTSE 100 to an intraday high of 6,875.62, its highest level since January 2000. ...

ECB's Weidmann tells France - Don't repeat budget mistakes

Wed, 22 May 2013 16:56:36 +0100

PARIS (Reuters) - France must step up reforms to rein in its budget deficit, Bundesbank chief Jens Weidmann said in a magazine interview, urging Paris to avoid repeating "the mistakes of the past." The European Commission has proposed that EU states grant France two more years to bring its deficit below a ceiling of 3 percent of output because of the country's poor economic outlook within a recession-hit euro zone. ...

Manipulation probe draws attention to oil firms' trading desks

Wed, 22 May 2013 16:08:19 +0100

By Dmitry Zhdannikov and Claire Milhench LONDON (Reuters) - Europe's energy price manipulation probe has turned regulatory attention to secretive trading units at oil companies with huge turnover and millionaire staff with risk appetite higher than at Wall Street's biggest banks. Regulators have scrutinised banks, trading houses and commodities markets more closely following the Libor benchmark rigging scandal but trading desks at oil majors have largely escaped attention. ...