Economic News

WASHINGTON (AP) - Globalization hasn't hobbled the Federal Reserve's ability to influence economic activity at home by lowering or raising interest rates, Fed Chairman Ben Bernanke said Friday. Yet, Bernanke said, increasingly connected financial markets around the world has certainly complicated the Fed's ongoing job of analyzing financial conditions and weighing their implications for moneta ...

LONDON (AFX) - European government bonds ended the week higher as investors sought the safety of bonds after losses in equities worldwide pushed them to reconsider the level of risk in financial markets. "As elsewhere, equity market volatility is the dominant theme and influence" in European bond markets, said Marc Ostwald at Insinger de Beaufort. Although bonds were propped up this mo ...

The private equity industry has agreed to form a voluntary code to try and improve its disclosure. The move, by the British Venture Capital Association (BVCA), comes after a spate of attacks on the industry for not being open enough. Chancellor Gordon Brown has praised the groups' ability to create jobs quickly and contribute to the economy. But MPs and unions are among those who have criticised private equity in recent weeks. 'Distinguish' Private equity companies use clients' money and b ...

The government says its below-inflation public sector pay rises are fair for staff and good for the economy. But the Treasury is preparing for a rough ride from angry unions, with some threatening industrial action. Nurses were "angry, frustrated and let down" at the decision to bring in their increase in two stages, leaders said. While nurses will get a 1.9% rise, GPs will get none at all. Some armed forces personnel will get 9.2%, but senior civil servants will receive just 1.4%. 'Fair set ...

LONDON (AFX) - European government bonds remained firmer as equity markets continued to fall, though gains were tempered by news this afternoon of a stronger-than-expected survey on US manufacturing. Stocks plummeted earlier in the afternoon on ongoing worries over troubles in the US sub-prime lending market. Though they recovered slightly in the wake of the US ISM data, equities remained weak he ...

WASHINGTON (AFX) - The US economy is "healthy" and transitioning to a soft landing after blockbuster growth in early part of last year, Treasury Secretary Henry Paulson said today. "For a number of months now I have believed that the US economy is successfully transitioning to a a moderate and sustainable rate of growth, and yesterday's data supports this view," he said in a s ...

(Adds TUC comment) LONDON (AFX) - Unions have reacted with fury at Chancellor Gordon Brown's decision to hold the pay rises of teachers, nurses and other public sector workers at 1.9 pct. Brown made the announcement in parliament today, telling MPs that the rises would be implemented in two stages, and the armed forces in full, from April 1. "The overall awards come within the inflation ta ...

LONDON (AFX) - The dollar was supported this afternoon by a stronger-than-expected reading in the US manufacturing ISM indicator. The ISM rose to 52.3 in February, above the January reading of 49.3 and analysts' expectation for 50. The February number continued an alternating pattern for the manufacturing index, which showed contraction in November, then rebounded in December, only to fall back a ...

LONDON (AFX) - European government bonds turned higher, helped by falls on equity markets and solid demand in bond auctions in France and Spain. "In addition to the post-auction relief in euro zone government bond markets, bonds are catching an extra bid now as equity markets tumble anew," said Michael Cartine at Thomson IFR Markets. Bonds had dropped earlier, pressured by a further ri ...

LONDON (AFX) - The Japanese yen made broad gains against major currencies, marking its strongest levels against the dollar in eight weeks. The dollar fell below resistance at 118.0 level yen, while the euro fell below 156.0 yen, raising speculation that an unwinding in carry trades -- when investors borrow in countries with low interest rates to invest in higher-yielding economies -- may have sta ...