Austerity not going away
Austerity will remain in place in Britain for years to come, the British government said on Thursday even though the UK economy is growing faster than most of its peers. That was the message from British Chancellor of the Exchequer George Osborne as he unveiled his latest tax and spending plans. He pledged to “fix the roof while the sun is shining” even when the budget is expected to turn a small cash surplus in the 2018 to 2019 financial year. Osborne said the British economy is expected to grow 1.4 percent this year instead of the previous forecast of 0.6 percent. Next year, growth is forecast to be even stronger at 2.4 percent against 1.8 percent.
Bank holds record-low rate
The European Central Bank (ECB) held its key interest rate at a record low of 0.25 percent on Thursday, while raising its forecast for the eurozone’s gradual recovery, despite prolonged low inflation. ECB President Mario Draghi said the cheap money would keep flowing, reiterating that he expected “key rates to remain at present or lower levels for an extended period of time.”
Deutsche Bank cuts 200 jobs
Deutsche Bank AG is cutting about 200 commodities jobs, joining the world’s largest financial firms in reducing headcount to the lowest since 2009 as prices for everything from energy to metals head for the first annual drop since the recession. The bank will exit dedicated energy, agriculture, dry bulk and base metals trading, and transfer its financial derivatives and precious metals desks to the fixed income and currencies division. Deutsche Bank is joining JPMorgan Chase & Co and Morgan Stanley in cutting back after investors pulled a record US$34.1 billion from commodity funds globally since December last year.
Hijacking stopped: Microsoft
Microsoft on Thursday announced it worked with Europol’s European cybercrime center, the US FBI and tech industry allies to disrupt a “dangerous” army of virus-infected computers used to hijack searches at Google, Bing and Yahoo. Microsoft estimated the bogus online advertisement billing and stolen traffic cost advertisers about US$2.7 million monthly.
Brazil production hits record
Vehicle production in Brazil, the world’s fourth-largest car market, reached a record 3.5 million units over the first 11 months of the year, according to industry data released on Thursday. The total beat a previous record of 3.4 million units produced during the whole of 2011 and was up 11.8 percent over the total for last year, the National Association of Motor Vehicle Manufacturers said. Exports during the period totaled a record US$15.4 billion with 522,900 units sold, up 29.4 percent from last year.
Qantas downgraded to ‘junk’
Embattled Australian carrier Qantas’ credit rating was downgraded by Standard & Poor’s (S&P) to “junk” status yesterday after the airline issued a shock profit warning and cut jobs. Qantas on Thursday flagged a half-year loss of up to A$300 million (US$271 million) and said it would axe 1,000 jobs as it struggles under the weight of record fuel costs and fierce competition from subsidized rivals. In response, S&P cut the airline’s rating from “BBB-,” the lowest investment grade, to “BB+” and placed it on a creditwatch with negative implications.