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Friday, 19 April 2024
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European Business News (EBN), 97-01-16European Business News (EBN) Directory - Previous Article - Next ArticleFrom: The European Business News Server at <http://www.ebn.co.uk/>Page last updated January 16 1840 CETCONTENTS
[01] German inflation predicted to keep below 2%With German sales showing a marked dampening from a year earlier, the Deutsche Bundesbank has forecast that inflation is likely to remain under 2.0% for the next two years. That is the level that Buba has in the past considered tolerable for a year-on-year consumer price index rise.In its January monthly report the Bundesbank said it didn't see any risks from the current money supply situation in the market. The report of the Federal Statistics Office confirms this view with German retail sales rising a real calendar- and seasonally adjusted 2.0% in November from October, but falling a real 2.0% from the year-earlier month. In the first eleven months of 1996, retail sales fell a real 1.0% compared to the year- earlier Jan.-Nov. period. In addition, the Bundesbank said the globalization of markets has helped competition by reducing price pressures, while moderate German wage agreements will also help support low inflation. But low inflation is merely the healthy aspect of a stagnating German economy, where predicted jobless figures in excess of 4.5 million threaten to add huge additional costs to the federal government. As it struggles with single currency targets, Bonn is facing its biggest post-war unemployment crisis. In an attempt to alleviate the situation, German Finance Minister Theo Waigel will impose a new budgetary spending restriction when the government's annual economic report is released January 28. The new restriction requires the finance minister's approval on expenditures exceeding 500,000 Deutsch marks ($315,000). [02] France 3Q GDP grows 0.9%A rise in household consumption helped France's gross national product climb an inflation-adjusted rate of 0.9% in the third quarter of this year, after a dip of 0.2% in the second quarter. Neither figure was revised from provisional figures.For the year so far, GDP is up 1.3%, which is the target for 1996, said the National Statistics Institute. The rise between the second quarter and the third quarter is in part due to increased number of working days during the third quarter, INSEE said. INSEE said that domestic demand saw a rise of 0.5%, compared with a rise of 0.2% in the second quarter. Household consumption grew 0.9% in the third quarter after having fallen 0.9% in the second quarter. That helped GDP to increase by about 0.6 percentage points. Fixed capital formation contributed 0.2 percentage points to GDP based on a progression of 0.9% in the third quarter after having fallen 0.4% in the second quarter. Exports increased 3.1% compared with imports increasing 2%, contributing 0.3 percentage points in growth to GDP. However, inventories ate into GDP growth to the tune of 0.3 percentage points. [03] Boeing overhauls 737 rudderU.S. Vice President Al Gore has announced that the Boeing 737 rudder, the large movable tail section that helps the plane change direction, is to undergo a radical overhaul that will concentrate on reducing unspecified movement.As the Federal Aviation Administration announced it is preparing to order the changes, Gore said Boeing has agreed to the revisions and will pay for most of the upgrade. At a cost of $120 million to $140 million, the commitment is a clear sign of Boeing's need to restore faith to the public. The rudder design of the 737 model, which has a world-wide fleet of 2,700 to 2,800 planes, is suspected of contributing to two deadly airplane accidents. It is thought - if not proven - that rudder problems were the cause of crashes involving 737s near Pittsburgh in 1994 and Colorado Springs, in 1991. In both cases, the planes suddenly rolled and plunged to the ground before the pilots reported any problems. The Pennsylvania crash killed all 132 aboard, while 25 died in the Colorado accident. Investigators have not determined the cause of the crashes but just last week the FAA ordered that pilots flying these planes, the most widely used airliners in the world, be given extra training in how to handle such unexpected rolls. [04] Ford to cut work force at HalewoodFord Motor Co. is cutting 1,300 jobs at its Halewood plant near Liverpool, and will operate just one shift per day starting in April, the company said Today.Halewood, which now has 4,500 workers, will continue to produce Escort models until 2000, and the plant will be used to produce a new vehicle after that 'subject to appropriate product and investment approvals and to competitive levels of performance,' the company said. Union leaders blasted the decision. 'They intend to import Escorts into this country at the expense of British jobs,' said Tony Woodley, chief negotiator for the Transport and General Workers' Union. Woodley said it was easier to lay off workers in Britain than in other European countries. Ford employs 30,000 people in Britain. Ford Motor Co. is cutting 1,300 jobs at its Halewood plant near Liverpool, and will operate just one shift per day starting in April, the company said Today. Halewood, which now has 4,500 workers, will continue to produce Escort models until 2000, and the plant will be used to produce a new vehicle after that 'subject to appropriate product and investment approvals and to competitive levels of performance,' the company said. Union leaders blasted the decision. 'They intend to import Escorts into this country at the expense of British jobs,' said Tony Woodley, chief negotiator for the Transport and General Workers' Union. Woodley said it was easier to lay off workers in Britain than in other European countries. Ford employs 30,000 people in Britain. [05] Clarke plays down rate riseAmid speculation of a quarter-percent rise in the base lending rate, British Chancellor of the Exchequer Kenneth Clarke refused to hint what was discussed at yesterday's monthly monetary meeting. He would only reiterate that his policy is to set interest rates in order to hit the government's inflation target.'Sometimes I put up rates, sometimes I lower rates,' Clarke said. Britain aims to bring underlying inflation, excluding mortgage interest payments, to an annual 2.5%. It remained at 3.3% in October and November; December's retail inflation figures are due out later Thursday. While no rate changes were made initially after the monetary meeting, the Bank of England could signal a rate move in its normal money market operations. Many market watchers are expecting a 0.25 percentage point rise in the base lending rate, now at 6.0%. Speaking on a BBC radio news program, Clarke also noted that the pound is now 'very strong', adding that he takes sterling's movments into consideration when looking at monetary policy. 'A year ago, the pound strengthened by 15% (against the dollar) and against the dmark, 20%,' he said. 'Now that's very anti-inflationary.' Clarke added, however, that a stronger pound 'robs our exporters of the value of what they're selling.' [06] U.K. Conservative Member of parliament diesBritish Conservative member of parliament Iain Mills has died, Conservative Central Office confirmed Thursday. His death now leaves the government in a minority by one seat in the House of Commons.Mills, the 56-year-old member of Parliament (MP) for Meriden, had a majority of 14,699 at the 1992 election. Before his death, the government had 323 seats in the Commons, the same number as held by all the opposition parties combined. An election must be held by May 22, but John Major may have to call a snap poll if he is defeated in Parliament. From the European Business News (EBN) Server at http://www.ebn.co.uk/European Business News (EBN) Directory - Previous Article - Next Article |
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