Eurozone business activity falls

20 September 2012 Last updated at 05:20 ET

Activity among eurozone firms suffered its steepest contraction since June 2009, according to a survey.

The Markit Flash Eurozone Purchasing Managers' (PMI) Composite Output Index fell to 45.9 in September from 46.3 in August, its lowest level for 39 months.

The composite figure combines services and manufacturing activity, and a figure below 50 indicates contraction.

Markit said the results indicated the eurozone was heading back into recession.

The services PMI activity index fell from 47.2 to 46, but the manufacturing PMI output index rose to 45.5 from 44.4 in August.

"The eurozone downturn gathered further momentum in September, suggesting that the region suffered the worst quarter for three years," said Chris Williamson, Markit's chief economist.

"The flash PMI is consistent with GDP contracting by 0.6% in the third quarter and sending the region back into a technical recession."

However, while there were falls in production and new orders across the eurozone as a whole, Germany's rate of decline slowed "substantially".

"Services even saw a marginal upturn in activity for the first time since May," the report said.

But employment fell for the ninth consecutive month across the eurozone, with French payroll numbers being cut at the fastest rate since November 2009.

Chinese manufacturing

Earlier, the flash PMI manufacturing measure for China had indicated another fall in output in the sector, adding further to eurozone woes.

The survey of factory managers found that while the rate of decline had slowed, manufacturing still fell in September for the 11th month in a row.

The HSBC flash China manufacturing PMI rose from 47.6 in August to 47.8 in September.

China has given the go-head for infrastructure projects worth more than $150bn (£93bn).

20 Sep, 2012

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Homes market 'flat like economy'

20 September 2012 Last updated at 05:23 ET

Activity in the UK housing market was subdued in August as the economy was flat and household confidence low, lenders have said.

Gross mortgage lending fell slightly from £12.7bn in July to £12.6bn in August, the Council of Mortgage Lenders (CML) said.

This was 4% lower than August last year, the lenders' group said.

It predicted that new schemes to encourage lending could inject some life into the market.

These included the NewBuy scheme, which aims to match newly built properties in England with buyers unable to offer a large deposit.

More significant, the CML argued, would be the Funding for Lending scheme, in which the Bank of England will lend money at below-market rates to the financial institutions in order for them to lend the funds to potential homeowners and businesses.

"The scheme is a bold move that has the potential to greatly influence the course of the housing market over the next year or so," said CML chief economist Bob Pannell.

"While not a panacea for all housing market problems, the scheme does offer the potential to improve the lending environment. Unfortunately, it will be towards year-end before any initial assessment of its impact can be reached."

But there have been some reservations about the scheme.

"The Funding for Lending scheme is bold but there has also been a fair bit of bluster," said Ashley Brown, director of mortgage broker Moneysprite.

"It may have triggered some activity but unfortunately none of it has been in the right areas. It has seen better deals for the people who do not really need them, and little of note for those that do."

In the meantime, the CML is reporting a slow market at present.

"This should not be a big surprise, during a period when the UK economy is pretty flat and household confidence is in the doldrums," Mr Pannell said.

20 Sep, 2012

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UK retail sales hit by Olympics

20 September 2012 Last updated at 04:51 ET

Retail sales in the UK fell during in August as people put off shopping to watch the Olympics, figures show.

Sales fell 0.2% in August from July, according to the Office for National Statistics (ONS).

The ONS said lower sales were driven by a fall in online sales as consumers watched the Olympics instead of shopping on the internet.

However, sporting goods stores saw a sales boost from the Olympics and the new football season.

Analysts said the weak overall sales figure underlined persistent worries over the strength of the economy.

"With retail sales there may have been a lot of distortions due to the Olympics and the risks are to the downside... there is no sign the UK will bounce back strongly," said Paul Robson, currency strategist at RBS.

20 Sep, 2012

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Wen set for final China-EU summit

20 September 2012 Last updated at 00:35 ET

China's premier Wen Jiabao is to take part in his last EU-China summit before handing over power later this year.

His talks in Brussels with senior EU figures, including European Council President Herman Van Rompuy and foreign policy chief Catherine Ashton, are expected to focus on economic issues.

Beijing has previously expressed concerns about Europe's economic slowdown and offered to help.

Mr Wen is seen as having played a key role in building Chinese-EU relations.

Bilateral trade has more than quadrupled under his nine-year premiership.

The EU is now China's largest export market and the world's second-largest exporter to China.

'Consolidating relations'

There have been trade disputes between the partners - such as a recent EU decision to investigate allegations that Chinese manufacturers are dumping solar panels by selling them at below market value.

But EU officials believe these disputes must be seen in the context of a broad and growing economic relationship, says the BBC's Chris Morris in Brussels.

The Chinese government has also repeatedly expressed concern about Europe's faltering economy, which continues to struggle through a eurozone debt crisis.

There had been hopes that China would invest some $3 trillion (2.3 trillion euros; £1.85 trillion) of its foreign exchange reserves in European bailout funds - although pressure has now been eased by a European Central Bank decision to buy up government bonds.

In this context, the BBC's Chris Morris in Brussels says this summit will be all about consolidating relations rather than taking big decisions.

Europe's leaders, he says, have their eye on China's leadership change, which only happens once every decade and could bring new challenges in relations between these major economic powers.

20 Sep, 2012

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Marikana miners return to work

20 September 2012 Last updated at 02:25 ET

Miners in South Africa are returning to work at the Marikana platinum complex, which was the scene of violent protests in which 44 people died.

Striking miners reached an agreement with owners Lonmin on Tuesday. It will see their salaries rise by up to 22%.

Lonmin is hoping to recover some of the big losses it incurred during the six-week stoppage.

An investigation is under way into the deaths of the miners, 34 of whom were shot by police.

The strikes have spread to other mines in South Africa, one of the world's biggest producers of precious metals.

Spreading strikes

On Monday, President Jacob Zuma said the disruption had cost the industry $548m (£337m) in lost output.

On Wednesday, police fired rubber bullets and tear gas to disperse protesters near a mine owned by Anglo American Platinum (Amplats), the world's largest platinum producer.

Amplats had re-opened its mines on Tuesday after they were closed last week.

Last week, the government announced it would clamp down on the protests.

The Marikana miners had been demanding a monthly salary of 12,500 rand ($1,513; £935) - they currently earn between 4,000 and 5,000 rand.

As well as a pay rise of 11-22%, they will get a one-off payment of 2,000 rand to help cover the weeks of not being paid while they were on strike.

Analysts had warned that the Lonmin deal could encourage other miners to down tools to obtain pay hikes.

Some 15,000 miners at Gold Fields' Dreifontein Gold Mine remain on strike.

20 Sep, 2012

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Sky 'fit and proper', says Ofcom

20 September 2012 Last updated at 02:21 ET

Media regulator Ofcom has decided Sky is a "fit and proper" company to hold a broadcasting licence.

Ofcom was investigating the satellite broadcaster in the wake of the phone hacking scandal that engulfed Rupert Murdoch's News Corp media empire.

News Corp owns 39% of BSkyB, and James Murdoch, Rupert's son, was chairman until he stepped down in April.

Ofcom said, however, that "should further evidence become available" it would look at the issue further.

In a statement, Ofcom said: "In July 2011, in light of the public debate about phone hacking and other allegations, Ofcom confirmed that it had a duty to consider whether Sky was fit and proper to continue to hold its broadcast licences.

"Ofcom considers that, on the evidence currently available and having taken into account all the relevant factors, Sky is fit and proper to hold its broadcast licences.

"Should further relevant evidence become available in the future, Ofcom would need to consider that evidence in order to fulfil its duty."

Last May, the Commons media committee concluded that Rupert Murdoch was "not a fit person" to run a major international business. However, four of the 10 committee members disagreed, as the MPs split on party lines.

20 Sep, 2012

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Former Reebok India boss arrested

20 September 2012 Last updated at 00:56 ET

Former managing director of sportswear business Reebok India, Subhinder Singh Prem, and ex-chief operating officer Vishnu Bhagat have been arrested in connection with a fraud case.

They have been alleged to have indulged in fictitious sales and fudging of company accounts.

Reebok has claimed that such activities had resulted in a loss of almost 8.7bn rupees ($160m; £100m) for the firm.

The two former executives, who left the firm in March, have denied the charges.

Three other people have also been arrested in connection with the case.

"We will seek police remand. All these accomplices were not co-operating with the police," Gurgaon Police Commissioner KK Sandhu was quoted as saying by the Economic Times in India.

The case come to light after Adidas, the parent company of Reebok, warned investors early this year that "commercial irregularities" at its Reebok unit in India could dent the firm's profits.

20 Sep, 2012

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India strike over retail reforms

19 September 2012 Last updated at 23:43 ET

Opposition parties and trade unions in India are joining in one-day strike over the government's plan to open the retail sector to global supermarket chains and other reforms.

Early reports said that opposition workers had blocked railway tracks in Uttar Pradesh and Bihar states.

A key ally of the ruling coalition has pulled out of the government in protest at the plan.

Observers say the coalition's majority in parliament is not at immediate risk.

Delhi's plan is aimed at reviving a flagging economy, but small shops fear they will be put out of business.

The decision was one of several reforms announced by the government last week.

It also decided to allow foreign airlines to buy 49% stakes in local carriers, in the hope that this will boost the country's troubled aviation sector.

The government also announced a 14% rise in the price of diesel, which is heavily subsidised in India.

Angry

The Trinamool Congress party, a key ally of the ruling coalition, has said it would pull out of the government and that its six ministers would resign on Friday.

Thursday's nationwide strike, called by the main opposition Bharatiya Janata Party (BJP), its allies and Communist parties, is expected to shut down schools, businesses and public transport in many cities.

TV channels showed protests taking place in the cities of Patna, Allahabad and Varanasi in northern India.

Most businesses were shut in the eastern city of Calcutta and public transport was disrupted, reports said.

The Confederation of All India Traders said 50 million people were expected to participate in the protests, and that large demonstrations were planned in Delhi and other cities.

"Multinational companies will destroy the economic and social fabric of the country and will adversely impact traders, transporters, farmers and other sections of retail trade," Praveen Khandelwal, the head of the group, was quoted as saying by AFP news agency.

A BJP spokesperson said people were supporting the strike because they were "angry at the recent decisions of the government".

Under the government's proposal, global firms - such as Walmart and Tesco - will be able to buy up to a 51% stake in multi-brand retailers.

Multinational retailers already have outlets in India, but they deal with smaller retailers. This decision allows them to sell directly to Indian consumers.

Indian Prime Minister Manmohan Singh has said the reforms would "help strengthen our growth process and generate employment in these difficult times".

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Programmer admits to data theft

20 September 2012 Last updated at 00:02 ET

Chunlai Yang, a former programmer for CME Group, the largest US futures exchange operator, has admitted to stealing trade secrets from the firm.

He pleaded guilty to downloading CME's computer codes to help boost trading speeds and volumes at a Chinese exchange.

The US government said the potential loss from the theft was between $50m-$100m (£30m-£60m).

Mr Yang, a Chinese national who has US citizenship, faces 10 years in jail.

"Trade secret theft is a serious economic crime that affects the interests of corporations, as well as our national interest, in protecting intellectual property," said Gary Shapiro, acting United States Attorney for the Northern District of Illinois.

20 Sep, 2012

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Electric car money 'only for few'

19 September 2012 Last updated at 22:47 ET

Government spending of £11m to encourage people to drive electric cars has benefited only a "handful of motorists", MPs have said.

They also warned the scheme was being used to subsidise second cars for more affluent households.

In a report, the Transport Select Committee questioned whether this represented a good use of public money.

The government offers grants of up to £5,000 towards the cost of plug-in cars in a bid to reduce carbon emissions.

And a network of more than 1,600 public charging points has been set up across the country to encourage drivers to switch.

Chair of the cross-party committee, Louise Ellman MP said: "The government must do more to show that its plug-in vehicle strategy is a good use of public money.

'Far more work'

"Carbon emissions from transport must be reduced if the UK is to meet its climate change targets, but public money must be targeted on effective policies.

"So far, Department for Transport expenditure on plug-in cars - some £11m - has benefited just a handful of motorists.

"We were warned of the risk that the government is subsidising second cars for affluent households; currently plug-in cars are mostly being purchased as second cars for town driving."

The committee said it was unclear whether the government scheme, which was part of the coalition agreement, actually encouraged demand for plug-in cars.

The government had said it expects there to be tens of thousands of these cars on Britain's roads by 2015, with the number reaching six figures by 2020.

But the committee found that following the introduction of the grants in January 2011 only 1,052 eligible cars had been registered - up from 111 in 2010.

Ms Ellman said: "Ministers should not sit back and hope that the Government's policy on plug-in cars will reduce transport carbon emissions.

"Far more work is required to ensure that this programme is a good use of public funds."

In future, the government should set targets for the number of electric cars they expect to see on the roads and establish a national registry of vehicle charge points, the committee said.

20 Sep, 2012

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