Economic News

UK economic growth could fall below 2% early next year if interest rates continue to rise, a report has warned. The British Chambers of Commerce (BCC) said UK growth could decline if, as expected, the Bank of England raises rates to 5.5% in the coming months. Bank policymakers announced a shock rise in interest rates to 5.25% from 5% in January, in a bid to curb inflation. Although the Bank avoided a second quarter point rise this month, analysts are expecting a further increase. The BCC sai ...

(updating with Fukui comments on interest rates) ESSEN, Germany (AFX) - Japan's Finance Minister Koji Omi said the yen's value on the foreign exchange markets reflects fundamentals, which are improving all the time from the solid economic recovery taking place in the domestic economy. "Exchange rates should reflect economic fundamentals and the Japanese economy is recovering at a steady pac ...

WASHINGTON (AFX) - While inflation has been too high in recent years, there is no evidence that a prolonged and dangerous shift to permanently faster price increases has taken place, a top Federal Reserve official said today. "Measures of inflation expectations have remained fairly stable even as actual inflation rates rates have moved higher and become more volatile," said Sandra Piana ...

RIGA, Latvia (AFX) - Latvia's economy continued to surge last year, with gross domestic product growth peaking at 11.9 percent, government officials said Friday. The achievement was probably the best in the European Union, which the Baltic country joined in 2004. Latvia's economy, traditionally the poorest in the bloc based on GDP per capita, has been expanding rapidly for several years because  ...

ESSEN, Germany (AFX) - The prospect of the yen being explicitly mentioned in tomorrow's communique from the G7's finance ministers diminished further today as US Treasury Secretary Henry Paulson reiterated his view that the Japanese currency's weakness is market-driven, reflecting economic fundamentals. In a press briefing, Paulson indicated that the yen's weakness is not on his main list of prio ...

LONDON (AFX) - The Bank of England's (BoE) quarterly inflation report on Wednesday is expected to show January's increase in interest rates will not be the last. The inflation report will provide BoE's latest forecasts on growth and inflation. Official figures indicate that gross domestic product (GDP) and especially inflation are already running above the central bank's previous round of predict ...

WASHINGTON (AFX) - The US economy looks good and appears to be headed on the upswing, but inflation is not fully contained and further interest rate hikes are not out of the question, a top Federal Reserve official said today. "The US economy is fundamentally sound," said William Poole, President of the Federal Reserve Bank of St Louis, "I see an economy that appears to be transiti ...

LUSAKA, Zambia (AFX) - The Zambian government proposed Friday to raise a tax on mining companies, aimed at helping the copper-rich but impoverished nation cash in on high global copper prices. The proposed tax increase is part of the government's austere US$3 billion (euro2.3 billion) 2007 budget, released Friday? Finance Minister Ng'andu Magande said the government planned to negotiate with the ...

ESSEN, Germany (AFX) - Finance ministers and central bankers from the world's seven richest nations began gathering Friday for a two-day meeting to focus on foreign exchange issues, hedge funds, energy and education. While initial talk ahead of the meeting focused on European concerns that the Japanese yen, a driver of economic growth in Asia, has been weakening, a wider examination of foreig ...

BEIJING (XFN-ASIA) - The growth of China's trade surplus is expected to slow but remain at a relatively high level this year, the People's Bank of China said. "Our country's future trade surplus growth is expected to slow but will remain a relatively high level," the central bank said in its fourth quarter monetary policy report. The central bank said that export growth will likely be  ...