Prime Minister David Cameron has unveiled plans to transform London's East End into one of the "world's great technology centres".
[justify]Firms including Google and Facebook are to invest in the East London Tech City, he said in a speech.
He hopes the area, which includes Olympic Park, will challenge California's Silicon Valley as a global hub for technology.
[b]Mr Cameron[/b] made his announcement in Shoreditch, east London.
The initiative reflects his plan to create private sector jobs to fill the hole left by public sector spending cuts.
In a speech to businesses and entrepreneurs, [b]Mr Cameron[/b] said: "Right now, Silicon Valley is the leading place in the world for hi-tech growth and innovation.
"But there's no reason why it has to be so predominant.
'[b]Creativity and energy[/b]'
"Our ambition is to bring together the creativity and energy of Shoreditch and the incredible possibilities of the Olympic Park to help make east London one of the world's great technology centres."
He said the response from international technology firms and venture capitalists to the government's proposals had been "overwhelming".
Firms planning to invest in the area, which will stretch from Old Street to the Olympic Park, include Cisco, Intel and British Telecom.
The Olympic Park Legacy Company will provide office space in the Olympic Park.
[b]Mr Cameron[/b] said the government is committed to ensuring the UK can become "the most attractive place in the world" for innovative firms to start up.[/justify]
Source: BBC
www.bbc.co.uk
Thursday, November 04, 2010
Canada blocks BHP takeover bid for Potash
The Canadian government has blocked mining giant BHP Billiton's hostile takeover bid for the fertiliser group Potash Corporation.
The government said it was not convinced that the deal was in the Canadian interest.
BHP said it was "disappointed" with the decision, but believed that the deal would benefit Canada.
BHP now has 30 days to convince Canada the deal should be approved before the government makes its final ruling.
"In Canada, our natural resources are an important economic driver," said Canada's Industry Minister Tony Clement.
"I have come to the conclusion that BHP Billiton does not present a likely net benefit to Canada."
In response, BHP said that it would continue to cooperate with Mr Clement and would "review its options".
Mounting opposition
BHP made a $38.6bn (£23.7bn) bid for the Saskatchewan-based company in August.
Last month, the province's premier asked the Canadian government to block the bid.
Potash Corporation itself had already asked a US District Court in Chicago to block it, on the basis of BHP's "false statements and half-truths".
BHP said the lawsuit was "entirely without merit".
By law, government officials in Ottawa must review takeovers by foreign companies to make sure that Canada could gain a net benefit from any deal.
Anglo-Australian BHP Billiton is the world's largest mining company, while Potash Corporation controls more than 25% of the world's supply of potash - a common name given to salts mined for fertiliser.
The government said it was not convinced that the deal was in the Canadian interest.
BHP said it was "disappointed" with the decision, but believed that the deal would benefit Canada.
BHP now has 30 days to convince Canada the deal should be approved before the government makes its final ruling.
"In Canada, our natural resources are an important economic driver," said Canada's Industry Minister Tony Clement.
"I have come to the conclusion that BHP Billiton does not present a likely net benefit to Canada."
In response, BHP said that it would continue to cooperate with Mr Clement and would "review its options".
Mounting opposition
BHP made a $38.6bn (£23.7bn) bid for the Saskatchewan-based company in August.
Last month, the province's premier asked the Canadian government to block the bid.
Potash Corporation itself had already asked a US District Court in Chicago to block it, on the basis of BHP's "false statements and half-truths".
BHP said the lawsuit was "entirely without merit".
By law, government officials in Ottawa must review takeovers by foreign companies to make sure that Canada could gain a net benefit from any deal.
Anglo-Australian BHP Billiton is the world's largest mining company, while Potash Corporation controls more than 25% of the world's supply of potash - a common name given to salts mined for fertiliser.
Wednesday, November 03, 2010
Federal Reserve to pump $600bn into US economy
The Federal Reserve has announced that it will pump $600bn (£373bn) into the US economy by the end of June next year to try to boost the fragile recovery.
This stimulus, which equates to $75bn a month, is slightly more than many economists had expected.
The US economy grew by an annual rate of 2% between July and September, which is not enough to reduce high unemployment.
Some analysts see QE as the last chance to get the US economy back on track.
Second step
Interest rates are already close to zero, which means the Fed cannot reduce rates any further in order to boost demand - the more traditional policy used by central banks to stimulate growth.
Instead, it has announced a fresh round of QE, in which it will create money to buy long-dated government bonds. The move was widely flagged, with most analysts expecting the Fed to pump $500bn into the economy.
The programme has been dubbed QE2, after the Fed pumped $1.75tn into the economy during the downturn in its first round of QE.
It is in addition to the Fed's previously announced plan to reinvest $250bn-$300bn of repayments it is due from existing US mortgage debt investments over the coming year.
The Fed said in a statement that the "pace of recovery in output and employment remains slow. Household spending is increasing gradually, but remains constrained buy high unemployment, modest income growth, lower housing wealth and tight credit".
It added that it would "regularly review the pace of its securities purchases and the overall size of the asset-purchase programme in light of incoming information".
One member of the Fed's Open Market Committee, which decides interest rates and QE, voted against the additional stimulus measures.
Thomas Hoenig argued that further stimulus could, over time, create inflationary pressure and "destabilise the economy".
Bank lending
Opinions are divided about how effective QE2 will be, partly because of questions about how much impact the first, much larger, round of QE had.
Some credit the programme with pulling the US out of recession, while others argue that it had little impact on consumer demand and the tight credit conditions that make it hard for individuals and businesses to access bank finance.
As a result, some economists believe the Fed will have to pump far more than $500bn into the economy to make a meaningful difference.
"The bottom line is the plan provides a boost to the economy's growth, but it is not going to solve our problems," said Mark Zandi, chief economist at Moody's Analytics.
"Even with the Fed's action, we're going to feel uncomfortable about the economy in the next six to 12 months."
Slow growth
What most do agree on, however, is that the Fed had to do something.
The US economy grew at an annualised rate of 2% between July and September.
The annualised rate is the rate at which the economy would grow over a year if the three-month growth rate were replicated over all four quarters.
While this was an improvement on the 1.7% annualised growth seen between April and June, it was less than the 3.7% annualised growth recorded in the first three months of the year.
Together, these growth rates are below the historical rates posted by the US economy during recoveries from past recessions.
Also a cause for concern is the fact that growth in business inventories made up more than two-thirds of the annualised 2% third-quarter growth - in other words, businesses simply re-stocking following the downturn.
Job losses
Such modest rates of growth are having little impact on the high level of unemployment in the US, which currently stands at 9.6%.
Official figures show that the economy lost a 95,000 jobs in September, as public-sector cuts outpaced hiring by the private sector.
This was almost double the figure for August, when 54,000 jobs were lost.
It is this high level of unemployment that is acting as a key drag on economic growth.
This stimulus, which equates to $75bn a month, is slightly more than many economists had expected.
The US economy grew by an annual rate of 2% between July and September, which is not enough to reduce high unemployment.
Some analysts see QE as the last chance to get the US economy back on track.
Second step
Interest rates are already close to zero, which means the Fed cannot reduce rates any further in order to boost demand - the more traditional policy used by central banks to stimulate growth.
Instead, it has announced a fresh round of QE, in which it will create money to buy long-dated government bonds. The move was widely flagged, with most analysts expecting the Fed to pump $500bn into the economy.
The programme has been dubbed QE2, after the Fed pumped $1.75tn into the economy during the downturn in its first round of QE.
It is in addition to the Fed's previously announced plan to reinvest $250bn-$300bn of repayments it is due from existing US mortgage debt investments over the coming year.
The Fed said in a statement that the "pace of recovery in output and employment remains slow. Household spending is increasing gradually, but remains constrained buy high unemployment, modest income growth, lower housing wealth and tight credit".
It added that it would "regularly review the pace of its securities purchases and the overall size of the asset-purchase programme in light of incoming information".
One member of the Fed's Open Market Committee, which decides interest rates and QE, voted against the additional stimulus measures.
Thomas Hoenig argued that further stimulus could, over time, create inflationary pressure and "destabilise the economy".
Bank lending
Opinions are divided about how effective QE2 will be, partly because of questions about how much impact the first, much larger, round of QE had.
Some credit the programme with pulling the US out of recession, while others argue that it had little impact on consumer demand and the tight credit conditions that make it hard for individuals and businesses to access bank finance.
As a result, some economists believe the Fed will have to pump far more than $500bn into the economy to make a meaningful difference.
"The bottom line is the plan provides a boost to the economy's growth, but it is not going to solve our problems," said Mark Zandi, chief economist at Moody's Analytics.
"Even with the Fed's action, we're going to feel uncomfortable about the economy in the next six to 12 months."
Slow growth
What most do agree on, however, is that the Fed had to do something.
The US economy grew at an annualised rate of 2% between July and September.
The annualised rate is the rate at which the economy would grow over a year if the three-month growth rate were replicated over all four quarters.
While this was an improvement on the 1.7% annualised growth seen between April and June, it was less than the 3.7% annualised growth recorded in the first three months of the year.
Together, these growth rates are below the historical rates posted by the US economy during recoveries from past recessions.
Also a cause for concern is the fact that growth in business inventories made up more than two-thirds of the annualised 2% third-quarter growth - in other words, businesses simply re-stocking following the downturn.
Job losses
Such modest rates of growth are having little impact on the high level of unemployment in the US, which currently stands at 9.6%.
Official figures show that the economy lost a 95,000 jobs in September, as public-sector cuts outpaced hiring by the private sector.
This was almost double the figure for August, when 54,000 jobs were lost.
It is this high level of unemployment that is acting as a key drag on economic growth.
Santander UK chief to take over as Lloyds head
Antonio Horta-Osorio, head of Santander's UK business, is to take over from Eric Daniels as chief executive of Lloyds Banking Group.
The appointment is a coup for Lloyds, as Mr Horta-Osorio has built a strong reputation at the Spanish bank after leading a series of bold UK acquisitions and has kept the business in good shape throughout the financial crisis. He had been considered a potential successor to Alfredo Saenz, chief executive of Santander.
Mr Daniels, who had been under pressure to step down since Lloyds' controversial acquisition of HBOS, the troubled lender, said in September that he would retire next year.
Lloyds said on Wednesday that Mr Horta-Osorio would take over in March 2011. The announcement may come as a surprise given that Lloyds had recently signalled that the succession process was still in the early stages.
Mr Daniels returned Lloyds to profitability in the first half of the year and has overseen the bulk of the integration of the HBOS business, acquired at the height of the financial crisis.
However, Mr Horta-Osorio faces a number of big challenges. He will be charged with overseeing the disposal of the UK government's 41 per cent sake in Lloyds and will also have to negotiate the forced sale of 600 of its UK branches, as requested by European regulators.
Mr Horta-Osorio will be in a good position to lead this sale having recently overseen Santander's purchase of 300 retail branches that were sold by Royal Bank of Scotland.
Following a strong first half, Lloyds struck a note of caution on Tuesday about its performance in the third quarter, saying the two drivers of its recovery -- net interest margins and falling impairments -- had only been "modest".
Mr Horta-Osorio's defection is a blow to Santander, which is set to list its UK business on the London Stock Exchange in the first half of next year.
The bank has lined up Ana Patrica Botin, the daughter of Santander chairman Emilio Botin, to replace Mr Horta-Osorio as head of the UK business, though it has yet to announce the appointment.
Source: FT.com
The appointment is a coup for Lloyds, as Mr Horta-Osorio has built a strong reputation at the Spanish bank after leading a series of bold UK acquisitions and has kept the business in good shape throughout the financial crisis. He had been considered a potential successor to Alfredo Saenz, chief executive of Santander.
Mr Daniels, who had been under pressure to step down since Lloyds' controversial acquisition of HBOS, the troubled lender, said in September that he would retire next year.
Lloyds said on Wednesday that Mr Horta-Osorio would take over in March 2011. The announcement may come as a surprise given that Lloyds had recently signalled that the succession process was still in the early stages.
Mr Daniels returned Lloyds to profitability in the first half of the year and has overseen the bulk of the integration of the HBOS business, acquired at the height of the financial crisis.
However, Mr Horta-Osorio faces a number of big challenges. He will be charged with overseeing the disposal of the UK government's 41 per cent sake in Lloyds and will also have to negotiate the forced sale of 600 of its UK branches, as requested by European regulators.
Mr Horta-Osorio will be in a good position to lead this sale having recently overseen Santander's purchase of 300 retail branches that were sold by Royal Bank of Scotland.
Following a strong first half, Lloyds struck a note of caution on Tuesday about its performance in the third quarter, saying the two drivers of its recovery -- net interest margins and falling impairments -- had only been "modest".
Mr Horta-Osorio's defection is a blow to Santander, which is set to list its UK business on the London Stock Exchange in the first half of next year.
The bank has lined up Ana Patrica Botin, the daughter of Santander chairman Emilio Botin, to replace Mr Horta-Osorio as head of the UK business, though it has yet to announce the appointment.
Source: FT.com
Tuesday, November 02, 2010
Australia unexpectedly raises rates
By Peter Smith, FT.com
(FT) -- Australia's central bank has defied market predictions by lifting its official interest rate by 25 basis points to 4.75 per cent as it attempts to damp inflationary pressures as the country's economic recovery gathers pace.
The surprise move on Tuesday lifted the Australian dollar by as much as 1.1 per cent to US$0.9993.
Lifting rates for the first time since May, the Reserve Bank of Australia warned the country's economy was "subject to a large expansionary shock from the high terms of trade and has relatively modest amounts of spare capacity".
Seventeen out of 24 economists surveyed by Bloomberg had expected rates to be held steady although many had predicted an increase before the year end.
The central bank has now raised rates seven times since October last year when they hit a 49-year low of 3 per cent. Australia stood alone among the developed world by narrowly avoiding technical recession during the global financial crisis and its central bank was the first among the Group of 20 nations to begin raising rates in the aftermath of the downturn.
Canada, Norway, New Zealand and other nations have since tightened monetary policy, although not as aggressively as Australia which is enjoying boom conditions in its mining industry.
Glenn Stevens, RBA governor, said concerns about a larger than expected slowdown in China, Australia's top trading partner, had lessened, while most commodity prices had firmed.
"The [commodity] prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s," Mr Stevens said. Australia's biggest exports are coal and iron ore.
"While there has been a degree of caution in private spending behaviour thus far, the rise in the terms of trade, which is now boosting national income very substantially, is likely to lead to stronger private spending over the next couple of years, especially in business investment," he said.
Annette Beacher, senior strategist at TD Securities, said the deteriorating outlook for inflation in Australia had driven the latest rate hike and the central bank had now made "the official jump into restrictive monetary policy".
She predicted that the central bank will raise rates to 5.75 per cent "over the next year".
(FT) -- Australia's central bank has defied market predictions by lifting its official interest rate by 25 basis points to 4.75 per cent as it attempts to damp inflationary pressures as the country's economic recovery gathers pace.
The surprise move on Tuesday lifted the Australian dollar by as much as 1.1 per cent to US$0.9993.
Lifting rates for the first time since May, the Reserve Bank of Australia warned the country's economy was "subject to a large expansionary shock from the high terms of trade and has relatively modest amounts of spare capacity".
Seventeen out of 24 economists surveyed by Bloomberg had expected rates to be held steady although many had predicted an increase before the year end.
The central bank has now raised rates seven times since October last year when they hit a 49-year low of 3 per cent. Australia stood alone among the developed world by narrowly avoiding technical recession during the global financial crisis and its central bank was the first among the Group of 20 nations to begin raising rates in the aftermath of the downturn.
Canada, Norway, New Zealand and other nations have since tightened monetary policy, although not as aggressively as Australia which is enjoying boom conditions in its mining industry.
Glenn Stevens, RBA governor, said concerns about a larger than expected slowdown in China, Australia's top trading partner, had lessened, while most commodity prices had firmed.
"The [commodity] prices most important to Australia remain at very high levels, with the result that the terms of trade are at their highest since the early 1950s," Mr Stevens said. Australia's biggest exports are coal and iron ore.
"While there has been a degree of caution in private spending behaviour thus far, the rise in the terms of trade, which is now boosting national income very substantially, is likely to lead to stronger private spending over the next couple of years, especially in business investment," he said.
Annette Beacher, senior strategist at TD Securities, said the deteriorating outlook for inflation in Australia had driven the latest rate hike and the central bank had now made "the official jump into restrictive monetary policy".
She predicted that the central bank will raise rates to 5.75 per cent "over the next year".
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