Economy News Headlines - Yahoo! News UK

Europe's banks bleed from Greek debt crisis

2012-02-23T13:14:23Z

LONDON/PARIS (Reuters) - Greece's debt problems drove a slew of heavy losses across the European banking sector on Thursday, and bosses warned the euro zone crisis would continue to threaten earnings. From France to Germany, Britain to Belgium, some of the region's biggest banks lined up to reveal billions of euros lost through writedowns on Greek loans. "We are in the worst economic crisis since 1929," Credit Agricole chief executive Jean-Paul Chifflet said. Credit Agricole reported a record quarterly net loss of 3.07 billion euros (2. ...

Osborne welcomes cut in RBS bonuses

2012-02-23T13:13:43Z

LONDON (Reuters) - Chancellor George Osborne said he supported steps by the state-owned Royal Bank of Scotland to cut bonus payouts for its staff in its investment banking arm, and praised managers for helping to turn round the bank's fortunes. RBS, 82 percent owned by the government after a state bailout during the 2008 credit crisis, reported a fourth-quarter loss of 1.8 billion pounds, but said it paid out bonuses of almost 1 billion pounds in 2011. However bonuses to its GBM investment bankers were down 58 percent from 2010 to 390 million pounds. ...

Euro zone's economy to shrink in 2012, EU's to stagnate

2012-02-23T12:29:12Z

BRUSSELS (Reuters) - The euro zone economy is heading into its second recession in just three years and the wider European Union will stagnate, the EU's executive said on Thursday, warning that the currency area has yet to break its vicious cycle of debt. The European Commission forecast that economic output in the 17 nations sharing the euro will contract 0.3 percent this year, reversing an earlier forecast of 0.5 percent growth in 2012. The wider, 27-nation European Union, which generates a fifth of global output, will not manage any growth this year. ...

Double-dip recession setting in across eurozone

2012-02-23T12:16:19Z

The debt crisis will drag the eurozone into a long-warned double-dip recession this year, pulling down most neighbouring non-euro economies in its wake, the EU said Thursday.

Banking must change to serve SMEs - Bank's Haldane

2012-02-23T12:01:59Z

LONDON (Reuters) - Britain's banking industry needs sweeping changes so that it can better support small and medium-sized firms, and would benefit from more middle-sized banks which would be natural lenders to the sector, a top Bank of England official said on Thursday. The lack of lending to smaller businesses was one of the main drags on Britain's economy, Andrew Haldane, executive director for financial stability at the Bank, said. ...

European shares mixed, euro higher amid bank results

2012-02-23T11:53:18Z

European stock markets diverged and the euro rose against the dollar on Thursday as traders reacted to mixed earnings from the region's biggest banks and varied eurozone economic data.

EU's economy needs firewalls, discipline to recover - Rehn

2012-02-23T11:17:57Z

BRUSSELS (Reuters) - Europe's depressed economy will recover from its slump if it sticks to EU-mandated fiscal discipline and if the euro zone can agree a large enough stand-by rescue fund to win back investor confidence, the EU's top economic official said on Thursday. "We see in the Commission there is a clear need to further strengthen the euro area financial firewalls," EU Economic and Monetary Affairs Commissioner Olli Rehn told a news conference. "You have the new fiscal compact, reinforced economic governance and you have intensified fiscal consolidation ... ...

CBI factory orders index hits 6-month high in February

2012-02-23T11:02:25Z

LONDON (Reuters) - Britain's main factory orders index rebounded in February to its highest level in six months, boosting hopes that the economy is on track for recovery, the CBI's monthly industrial trends survey showed on Thursday. The Confederation of British Industry survey's total order book balance jumped to -3 from -16 in January, well above economists' forecasts of a reading of -14 and its highest since August last year. ...

EU's Rehn - expected euro zone slowdown seen as mild, temporary

2012-02-23T10:45:07Z

BRUSSELS (Reuters) - The European Union's top economics official said on Thursday that recent economic surveys showed that an expected slowdown in the euro zone would be mild. "Overall, recent developments in survey data suggest that the expected slowdown will be rather mild and temporary, but the turnaround of the trend still needs to be confirmed in the coming months and it essentially depends on the policy decisions to be taken," EU Economic and Monetary Affairs Commissioner Olli Rehn told a news briefing. ...

Key business survey shows Germany picking up speed

2012-02-23T10:33:16Z

BERLIN (Reuters) - German business sentiment rose to its strongest in seven months in February, offering fresh evidence that Europe's largest economy will dodge a recession even as euro zone peers tighten their belts to fight off the sovereign debt crisis. The Munich-based Ifo think tank's business climate index, based on a monthly survey of some 7,000 companies, rose to 109.6 in February, beating expectations for 108.8. That was its highest since July 2011 and the fourth increase in a row. ...

Credit Agricole posts record 3 billion euro quarterly loss

2012-02-23T10:18:28Z

PARIS (Reuters) - French bank Credit Agricole posted a record 3.07 billion euro (2.58 billion pound) quarterly net loss on Thursday, performing worse than expected due to the cost of shrinking its balance sheet and losses on Greek debt. The semi-cooperative bank, which is under new management and trying to return to its low-risk retail lending roots, was hit by more than 2 billion euros in quarterly one-off charges that it had already disclosed in December. ...

Bodycote profit surges, sees market share gains in 2012

2012-02-23T08:59:36Z

(Reuters) - British engineering firm Bodycote said it expected to gain more market share this year on the back of strong sales in emerging markets and its aerospace and defence segment. Shares of the Macclesfield, Cheshire-based company, which has a market capitalization of about 645 million pounds, surged 13 percent to 381.7 pence at 0839 GMT. It was the top percentage gainer on the FTSE 250 leaderboard in early trade on the London Stock Exchange. ...

Bank of England policy stance must be expansionary - Miles

2012-02-23T07:50:14Z

LONDON (Reuters) - The Bank of England must maintain a very expansionary monetary policy as the economy is still in a "precarious" situation, David Miles, a policymaker at the bank, said on Thursday. Miles, who joined long-standing dove Adam Posen in voting for a larger boost to the economy than the majority of the policymakers earlier this month, also said inflation looked set to fall further, ending the squeeze on household incomes. But Miles said the situation was changing month-to-month and declined to comment on his voting intentions come May when the current stimulus programme runs out. ...

Markets ease as focus moves to growth, oil prices

2012-02-23T07:45:40Z

TOKYO (Reuters) - Asian shares and the euro fell on Thursday on concerns about global growth driven by higher oil prices and data showing the euro zone may slip into recession, fanning fresh worries about Greece's debt restructuring challenges. MSCI's broadest index of Asia Pacific shares outside Japan slid 0.6 percent, having consolidated from recent rallies after the much-awaited deal for a 130 billion euro Greek bailout was sealed earlier in the week. Sectors sensitive to growth cycles, including technology and materials , underperformed. ...

China risks economic crisis if no reforms: report

2012-02-23T06:18:21Z

China could face an economic crisis if it does not implement major reforms in the next 20 years, the Wall Street Journal said Thursday, citing a report by the World Bank and Chinese government researchers.

G20 hopes for progress on EU debt crisis - Carstens

2012-02-22T22:40:43Z

MEXICO CITY (Reuters) - Group of 20 policymakers are hoping for a signal this weekend that Europe will boost crisis funding, smoothing the way for a deal to increase International Monetary Fund resources, the head of Mexico's central bank said on Wednesday. G20 finance ministers and central bankers will meet in Mexico City on Saturday and Sunday, with all eyes on the euro zone and the bloc's response to its sovereign debt crisis. ...

Policy pace to settle after Draghi's dramatic start

2012-02-22T21:47:57Z

FRANKFURT (Reuters) - Two rate cuts, an expected 1 trillion euro stimulus and tentative signs of the euro zone economy stabilising have diminished the chances that the European Central Bank will cut interest rates to a new low. The dramatic start of ECB President Mario Draghi's term may be about to calm down The ECB signalled earlier this month it would hold rates at 1 percent when it meets in early March and, with some of the gloom over the euro zone lifting and a deal on a Greek bailout reducing uncertainty, the bank is likely to stay in a wait-and-see mode for a some time - maybe even ...

Moet Hennessy to produce red wine in China

2012-02-22T20:18:26Z

Moet Hennessy, the wine and spirits arm of France's LVMH luxury group, said Wednesday it will make red wine in China where a taste for the better things in life has boomed along with the economy.

Growth concerns hit stocks, oil at 9-month high

2012-02-22T19:32:05Z

NEW YORK (Reuters) - Global stocks slipped and the euro was little changed on Wednesday after data showed the euro zone may be sliding toward recession and China's new export orders shrank in February. Brent crude oil prices climbed to nine-month highs as worries that Iran might interrupt supply outweighed concerns about the health of the global economy. A new wave of worries over Greece, after the initial relief following Tuesday's approval of a second bailout package, added to the uncertain tone for stocks and the euro and caused nervous investors to step back into low-risk U.S. ...

Turkish, Chinese firms to ink $1.38 billion deals: minister

2012-02-22T17:19:06Z

Turkish and Chinese companies will sign on Wednesday contracts totalling almost $1.38 billion as the two countries boost their economic ties, Turkey's Economy Minister Zafer Caglayan said.

FTSE edges lower led by weak banks, miners

2012-02-22T17:16:54Z

LONDON (Reuters) - The leading share index edged lower on Wednesday as investors refocused on fundamentals, specifically weaker-than-expected euro zone data, with the Greek debt restructuring theatricals out of the way for now. Recession concerns increased after data showed the euro zone's service sector unexpectedly shrank in February, with Europe being Britain's main market for its goods. ...

European stocks lower as Greek bailout hopes fade

2012-02-22T15:18:47Z

European stock markets were lower Wednesday but the euro held steady in cautious trade as relief at a massive Greek debt bailout gave way to growing scepticism that the deal can really work.

Ireland raises asset sales target to 3 billion euros

2012-02-22T13:27:16Z

DUBLIN (Reuters) - The Irish government raised its target for the sale of state assets to 3 billion euros (2.5 billion pounds) on Wednesday, unveiling a final list of utilities set to go on the block headed by the energy business of its Bord Gais utility. The government had previously said it was looking to raise 2 billion euros but had indicated it may exceed that after winning approval from its EU/IMF creditors to use some of the proceeds to invest in the economy as well as pay down debt. ...

Euro zone teetering on brink of recession

2012-02-22T13:13:27Z

LONDON (Reuters) - The euro zone economy is in danger of tipping into recession, with the services sector shrinking this month along with manufacturing, tempering a wave of optimism after a new bailout deal for Greece struck this week. Surveys of purchasing managers published on Wednesday showed unexpectedly weak activity in the region's most powerful economy, Germany, and in France. ...

Gilts jump after Bank minutes revive QE bets

2012-02-22T13:10:40Z

LONDON (Reuters) - Gilt prices jumped on Wednesday after Bank of England minutes unexpectedly showed that two policymakers had backed more gilt purchases than the majority earlier this month, reviving bets that there will be more quantitative easing in May. Many economists had judged that the momentum for the Bank offering yet more stimulus to the economy was fading after quarterly forecasts last week showed that it expected inflation significantly closer to its 2 percent target in two years' time than predicted in November. The economy has also showed signs of recovery. ...

Bank dissent reinvigorates prospects of more QE

2012-02-22T12:45:48Z

LONDON (Reuters) - The chances of more Bank of England asset-buying to support a fragile economy grew on Wednesday when minutes of February's policy meeting showed two officials sought a bigger increase this month in quantitative easing than was eventually agreed. However, the split among the nine policymakers seems to run deep as some considered doing nothing, worried that inflation may turn out higher than the central bank expects. ...

CBI urges Osborne to focus on growth goals in budget

2012-02-22T11:17:42Z

LONDON (Reuters) - Chancellor George Osborne should focus on implementing the growth-boosting measures he unveiled last year in the budget due on March 21, Britain's biggest business lobby group said on Wednesday. The Confederation of British Industry also railed against calls by the opposition Labour party for a temporary cut in value-added tax to boost demand, saying it would send the wrong signal to markets after Moody's warned Britain that its triple-A rating was at risk. ...

Euro zone factory orders rise in December

2012-02-22T10:34:08Z

BRUSSELS (Reuters) - A jump in Italian factory orders drove up euro zone industrial demand by more than expected in December compared to a month earlier, data showed on Wednesday, in the latest sign of an economic stabilisation at low levels. Manufacturing orders in the 17 countries that share the euro rose 1.9 percent in the month, the European Union's statistics office Eurostat said. Economists polled by Reuters had expected a 0.7 percent increase in December. Stripping out volatile orders for planes, trains and other heavy transport equipment, industrial new orders rose 2. ...

Tangled in diplomacy, EU struggles to frame new financial rules

2012-02-22T10:27:25Z

BRUSSELS (Reuters) - When it takes six hours to draft a single sentence in a 100-page document, you know things are moving slowly. In meeting rooms of embassies across Brussels, diplomats are haggling over the finer details of dozens of reforms more than four years after the financial crisis that devastated European banks and triggered the euro zone's struggle with debt. ...

High oil prices test US economy, Obama

2012-02-22T10:14:47Z

A jump in gasoline prices is threatening to smother the flickering flames of the US economic recovery and with them President Barack Obama's hopes of retaining the White House.

Bank considered bigger QE stimulus in February

2012-02-22T09:50:39Z

LONDON (Reuters) - Two Bank of England policymakers voted for a bigger stimulus to the economy in February than their colleagues could support, minutes to the Bank's February 8-9 meeting showed on Wednesday. David Miles joined long-standing dove Adam Posen in voting for a 75 billion pound boost, whereas the remainder of the MPC supported a 50 billion pound increase to 325 billion pounds, in line with market expectations. ...

Europe's debt crisis set to dominate G20 talks

2012-02-22T06:13:19Z

MEXICO CITY (Reuters) - Europe's debt crisis will dominate talks between Group of 20 (G20) policymakers this weekend as the rest of the world looks for pledges that the euro zone will boost its crisis safety net. Advanced and developing nations alike are keen for reassurances that the European Union will do whatever it takes to limit fallout from the crisis and convincing answers could help officials inch closer to boosting the firepower of the International Monetary Fund (IMF) so it can better help victims. U.S. ...

China's new export orders slump in February - HSBC

2012-02-22T05:55:48Z

BEIJING (Reuters) - China's new export orders shrank in February the most in eight months, a preliminary HSBC business survey shows, defying expectations of a pick up after Lunar New Year holidays and a worrying sign of the impact of the euro area debt crisis. Many analysts had expected some rebound in February after imports and exports fell the most in two years in January, when factories closed for several weeks for Lunar New Year holidays. ...

EU leaders to ask G20 to back higher IMF funds

2012-02-21T23:25:59Z

BRUSSELS (Reuters) - European Union leaders will call at a summit next week for the world's 20 biggest economies (G20) to agree in April to substantially boost funds available to the International Monetary Fund, draft conclusions of the meeting showed. The IMF is seeking to more than double its war chest by raising $600 billion (379.7 billion pounds) in new resources to help countries deal with the fallout of the euro zone debt crisis, but the plan faces resistance from the United States and other countries. ...

Iran "winning" on oil sanctions - top trader

2012-02-21T23:25:13Z

LONDON (Reuters) - An increase in world oil prices has more than compensated Iran for revenues lost to lower crude exports because of sanctions imposed by the West, the head of the world's leading oil trader said Tuesday. Ian Taylor, chief executive of privately-held Vitol, said a decline in the value of the euro versus the U.S. dollar had also lifted the cost of dollar-denominated oil sales to European Union countries. "The Iranians now want the price as high as possible as they've got less volumes to sell. I reckon they are probably quite close to winning based on the numbers. ...

Economy set for moderate recovery - Bank's Bean

2012-02-21T23:24:15Z

LONDON (Reuters) - The economy looks set for a moderate recovery starting later this year as falling inflation eases the squeeze on household incomes, Bank of England deputy governor Charles Bean said on Tuesday. While he welcomed the latest bailout deal for Greece, Bean said in a speech due for delivery at a business event in Glasgow that the euro zone debt crisis remains the single biggest risk to the UK economy, which may see slow growth until mid-year. ...

Stocks slip, cooled by rising oil prices

2012-02-21T22:05:10Z

NEW YORK (Reuters) - U.S. stocks retreated from a broad rally on Tuesday, undermined by rising oil prices and doubts about the success of Greece's second bailout, after the Dow Jones industrial average rose above 13,000 for the first time in nearly four years. The euro was little changed late in the day after hitting nearly two-week highs against the U.S. dollar overnight on news that European finance ministers approved the 130 billion euro bailout plan, avoiding the threat of a disorderly debt default. The Dow has gained more than 6. ...

European stocks hit as Greek deal lures profit takers

2012-02-21T17:57:40Z

LONDON (Reuters) - European shares ended lower in thin volume on Tuesday, with investors cashing in on recent highs after a long-awaited bailout deal for Greece failed to dissipate concerns about the future of the euro zone's most troubled country. While the agreement averted the imminent danger of a disorderly Greek default, further political and growth hurdles in Greece meant the spectre of a messy default, and further regional contagion, was not yet gone. The FTSEurofirst 300 index of pan-European shares fell 0.5 percent to 1,085. ...

Tough Greek deal likely to head off German backlash

2012-02-21T17:47:40Z

BERLIN (Reuters) - The severity of conditions attached to Greece's 130-billion-euro bailout deal looked set to head off a parliamentary backlash over the package in Berlin but Germans are still concerned about Athens' long-term ability to meet the demands and repay loans. Germany, the biggest euro zone contributor to the bailout, has taken a hard line in the tortuous negotiations with Greece, making Chancellor Angel Merkel a hate figure with some Greeks, with newspapers even printing montages of her in a Nazi uniform. ...

European stocks, euro lower after Greek debt deal

2012-02-21T17:18:38Z

European stock markets closed lower Tuesday and the euro weakened, reversing early gains, as enthusiasm over another massive eurozone bailout for Greece faded on concerns more will need to be done.