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The U.S. manufacturing sector expanded in April though the rate of growth was slightly lower than expected as inventories fell, but factory output growth hit its fastest pace in three years, an industry report showed on Wednesday. Financial data firm Markit said its preliminary or "flash" U.S. Manufacturing Purchasing Managers Index dipped to 55.4 in April from 55.5 in March.
By David Milliken and William Schomberg LONDON (Reuters) - Britain's hefty budget deficit has fallen to its lowest since the financial crisis, official data showed on Wednesday, helping the government argue it is delivering on a key economic pledge a year before a national election. The Bank of England, meanwhile, indicated it was not hurrying to raise interest rates, even if its members are somewhat divided about the economic outlook. The deficit in the 2013-14 tax year fell to 6.6 percent of gross domestic product from 7.4 percent in 2012-13 - in line with recent government plans. It was the smallest shortfall since 2007-08, though well above that of most other advanced economies - including the 3 percent expected of European Union countries - partly a reflection of how much the government used to rely on massive revenues from banking and housing before the financial crisis.
By Marja Novak LJUBLJANA (Reuters) - Slovenia's coalition government, which averted an international bailout last year, could collapse on Friday if Prime Minister Alenka Bratusek loses the leadership of her party, Positive Slovenia. The center-left Positive Slovenia will elect a leader late on Friday and Bratusek has indicated that she will quit the government if her challenger Zoran Jankovic, the party's founder and mayor of Ljubljana, becomes the new head. "I can hardly imagine that I could lead the government without having the support of my own party," Bratusek told reporters earlier this week. A government collapse and early elections would slow efforts to make Slovenia's economy more productive and could hurt sovereign bonds, whose yields have fallen back to their 2007 level in the past month as investors regained confidence in the government's budget management.
By Jeremy Laurence and Mirwais Harooni KABUL (Reuters) - A $375 million hole in the Afghan budget is threatening public projects and civil servants' salaries, officials say, putting the aid-dependent economy under stress just as Afghanistan awaits a new leader and foreign troops prepare to go home. U.S., U.N. and Afghan finance ministry officials have discussed ways to resolve what they say has become a critical situation for the budget, with civil projects most at risk as international assistance starts to taper off. "If the political situation of the country does not become normal and businesses do not start again soon this problem will become even more worrying," Alhaj Muhammad Aqa, director general of the treasury at the finance ministry, told Reuters on Wednesday. "We will not only face problems in paying salaries of employees but we will have difficulties in other issues too." Funding for security will not be affected, as costs are met by foreign governments which recognize that any chance of stability in Afghanistan rests on quelling the Taliban insurgency.
OTTAWA (Reuters) - Canadian retail sales grew for the second consecutive month in February, by 0.5 percent from January, but still have not completely recouped December's weather-induced losses, according to Statistics Canada data released on Wednesday. The sales increase follows a 0.9 percent rise in January and a 1.4 percent drop in December. The value of sales was C$41.03 billion ($37.30 billion), still a shade lower than November's peak of C$41.05 billion. All the figures are seasonally adjusted. In volume terms, relevant for calculating real economic growth, sales advanced by 0. ...
April 23 - Stock futures indicated lower opening for Canadian shares on Wednesday as signs of a slowing Chinese economy and worries about Ukraine offset some positive European economic data. Chinese factory activity shrank for the fourth straight month in April but private businesses across the euro zone enjoyed their best month in nearly three years. June futures on the S&P TSX index were down 0.02 percent at 0745 ET. ...
China will allow private investment in 80 projects spanning the energy, information and infrastructure sectors as part of reforms to increase privatization, Premier Li Keqiang said on Wednesday. In future, other sectors such as utilities, airports and oil and gas exploration will also be open to more private investment, he told a weekly cabinet meeting. His comments were posted on a government website and no further details were provided. Allowing more private investment in China's centrally planned economy is part of government's plans to reduce state intervention and let market forces play a bigger role in the world's second-biggest economy.
By Marc Jones LONDON (Reuters) - European shares edged down on Wednesday after three days of gains as signs of a still stuttering Chinese economy and rising worries about Ukraine offset a reassuring set of European economic numbers. U.S. stock futures pointed to a flat start for Wall Street on what will be another heavy day of company earnings as well as U.S. PMI readings.. Data compiler Markit's equivalent readings for Europe, seen as good indicators of future growth, showed that while France's economy was still lagging, Germany continued to power the euro zone's recovery.
By Aaron Maasho ADDIS ABABA (Reuters) - Ethiopia's bold decision to pay for a huge dam itself has overturned generations of Egyptian control over the Nile's waters, and may help transform one of the world's poorest countries into a regional hydropower hub. By spurning an offer from Cairo for help financing the project, Addis Ababa has ensured it controls the construction of the Renaissance Dam on a Nile tributary. But the decision to fund the huge project itself also carries the risk of stifling private sector investment and restricting economic growth, and may jeopardise Ethiopia's dream of becoming a middle income country by 2025. The dam is now a quarter built and Ethiopia says it will start producing its first 750 megawatts of electricity by the end of this year.
By Leika Kihara TOKYO (Reuters) - Over 90 percent of Japanese banks have increased loans and investment in riskier assets in the past year, the Bank of Japan said on Wednesday, suggesting that the wall of money it is pumping out is spilling over into the broader economy. "Financial institutions have reduced investment in domestic bonds, especially Japanese government bonds (JGBs), while increasing investment in relatively high-risk assets such as loans," the central bank said in a semi-annual report analyzing Japan's financial system. Banks are lending to a wider range of industries and are more keen to lend to small- and medium-sized companies whose appetite for loans is on the rise, the report said. Bank lending rose 2.1 percent in March from a year earlier, marking the 29th straight month of increase, with lending by regional banks up 3.2 percent, a monthly BOJ data showed.
By Hilary Russ NEW YORK (Reuters) - The "Bridgegate" scandal that rocked New Jersey Governor Chris Christie's administration earlier this year is threatening a deal that would allow developer Larry Silverstein to finish building the next World Trade Center skyscraper. Silverstein needs a guarantee from the Port Authority of New York and New Jersey to secure a $1.2 billion construction loan for 3 World Trade Center. On Wednesday, the agency's board will vote on whether to approve that guarantee, part of a deal that would provide hundreds of millions of dollars more to the Port Authority and allow it to foreclose on the $2.4 billion tower if Silverstein cannot pay debt service costs. But Silverstein's deal, even with the concessions to the Port Authority, has become entangled in a fierce debate within the agency over its mission, including whether it should be in the real estate business at all.
Zimbabwe will let foreigners keep majority stakes in banks for now because locals have no money to buy shares, the finance minister said on Wednesday, signalling a pause in President Robert Mugabe's black economic empowerment drive. But Patrick Chinamasa said the government would not amend on plans to force foreign mining companies to sell at least 51 percent of their local holdings to Zimbabweans under the empowerment programme, known locally as indigenisation. The southern African country, which ditched its hyper-inflated local currency in 2009, is facing a serious dollar crunch as a result of lack of foreign donor support and investment, and some smaller local banks are struggling to stay afloat. The law obliging foreign-owned firms, including mines and banks, to sell at least 51 percent of their stakes to blacks was passed as long ago as 2008.
Britain's economic recovery is gaining momentum but Bank of England policymakers held different views about the amount of slack in the economy and the medium-term inflation outlook, minutes from their April 9 meeting showed. The Bank expects the economy grew by 1 percent in the first three months of this year from the fourth quarter of 2013, up slightly from a previous growth forecast of 0.9 percent, the minutes showed. Economists at the Bank expected a slight slowdown in the April-June period. Members of the Monetary Policy Committee also thought it was "possible" that a sustainable rise in real wages, consistent with a durable recovery, was on the way.
We are looking at 0.5 percent quarter-on-quarter GDP growth if we continue to see this level," said Chris Williamson, chief economist at Markit. Inflation fell to just 0.5 percent in March, its sixth straight month in what European Central Bank President Mario Draghi has called a "danger zone" below 1 percent and keeping pressure on the ECB to intervene. However, Markit's flash Composite Purchasing Managers' Index, which is widely regarded as a good gauge of growth, suggested the economic support, at least, may not be necessary.
By Antoni Slodkowski and Linda Sieg TOKYO (Reuters) - The United States put last-minute pressure on Japan to compromise in tough trade talks on Wednesday, shortly before President Barack Obama was to arrive for a state visit. The two-way talks - focusing on Japan's agricultural market and both countries' car markets - are key to reaching a multilateral trade pact that is central to Obama's strategic shift towards Asia. Japanese Prime Minister Shinzo Abe has touted the broader trade deal as vital for growth in the world's third biggest economy. "This a moment for Japan to take an elevated view and to choose a bold path of economic renewal, revitalization and regional leadership," U.S. Trade Representative Michael Froman told reporters after negotiating with Economy Minister Akira Amari ahead of Obama's evening arrival.
Snohomish County was on Wednesday to consider a six-month ban on new construction in landslide-prone areas countywide after a slide last month that killed 41 people, local media reported. A rain-soaked hillside collapsed above the Stillaguamish River on March 22 unleashing a torrent of mud that swallowed up a stretch of state highway and about three dozen homes near the small community of Oso, about 55 miles northeast of Seattle. The Snohomish County Medical Examiner's Office said the remains of 41 victims had been recovered from the slide that buried the river valley neighborhood in the Cascade mountain foothills. U.S. President Barack Obama on Tuesday visited the site, offering condolences to the families of victims, encouragement to rescue workers and promises of government support.
(Reuters) - The mother of a 17-year-old student who was among 10 people killed in a highway crash in northern California earlier this month has sued FedEx Corp for negligence, California-based City News Service reported. More than 30 others were injured when a FedEx tractor-trailer crossed a highway median and slammed into a bus on Interstate 5 about 90 miles north of Sacramento. FedEx and the family's attorney did not immediately respond to requests for comment. "We remain focused on providing support to those affected and cooperating with the authorities as they conduct their investigation," FedEx said in a statement, according to CNS.
Germany's private sector expanded faster in April, recovering from a slight slowdown in growth in March, as both manufacturing and services industry activity rose more than expected, surveys showed on Wednesday. Markit's preliminary composite Purchasing Managers' Index (PMI), which tracks activity in the manufacturing and services sectors and covers more than two-thirds of the euro zone's largest economy, rose to 56.3 in April from March's final 54.3. "This is a nice bounce back with good broadbased growth in the services and manufacturing sector... It is looking like it will be a good year for Germany," Markit economist Chris Williamson said. Germany's economy expanded just 0.4 percent in 2013, but growth is seen picking up this year, driven by domestic demand.