Triple A warning
Moody waters
Ratings agency Moody's has warned that it will have to reassess the AAA rating of the US in the event of another budget impasse occurring in the coming months. Successful budget negotiations, which are slated for 2013, are viewed as crucial to the US retaining its top rating. With Presidential elections looming and the recent history of budget negotiations going down to the wire, there is huge uncertainty over the US economy and its future direction. But what is certain is that without agreement the US faces a 'fiscal cliff' that will trigger automatic budget cuts which could slash several percentage points from GDP growth.
Glenstrata rumbles on
Offer upped
Glencore has fleshed out the details of its revised merger proposal to Xstrata, upping the ratio of shares offered from 2.8 to 3.05, still below the 3.25 targeted by key Xstrata shareholder Qatar Holding. The revised deal, which is increasingly resembling a takeover rather than a merger of so-called equals, will also see Xstrata chief executive Mick Davis ousted from the hot seat of the enlarged business after an initial six-month period, with Glencore boss Ivan Glasenberg taking over in the long term. The Xstrata board is considering its options but is in a tricky position if it were to reject the offer having already recommended the lower bid.
Export boost
Trade gap shrinks
The UK's trade deficit shrank by almost £3bn to £7.15bn between June and July, beating expectations of a gap of £9bn. The main driver was a vastly improved export performance - in fact, the biggest monthly rise in exports since the data series began in 1998. Manufacturing output also improved after the extra days lost to Jubilee celebrations in the previous month. The figures gave some hope that the UK may finally be beginning to claw its way out of the double-dip recession it has been stuck in.
China crisis?
Not likely, says Wen
Chinese premier Wen Jiabao has moved to calm fears over the state of the Chinese economy after a raft of figures during the past six months, which suggest that authorities may struggle to manage the soft landing they were trying to orchestrate. Following news of a $160bn infrastructure splurge last week, Mr Wen told the World Economic Forum's summer meeting that the country is capable of fast and stable growth and will hit its 7.5 per cent growth target this year. This is the slowest growth for many years, but is a result of the necessary restructuring of the Chinese economy, according to Mr Wen.
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German ESM okay
Euro lift
The German constitutional court convened to consider objections to the formation of the European Stability Mechanism (ESM) has rejected the complaints, effectively ratifying the latest stage of the eurozone's plans to drag itself out of the economic mire. The court did impose limitations on Germany's liability, capping it at €190bn (£152bn). Any move above that level will need government approval. Meanwhile, European Commission head Josè Manuel Barroso has called for a deeper political union on the continent, pushing it towards a federation of states.
Jobs boost
UK data improving
The number of people in work in the UK has risen, possibly due to the Olympics in London. The number people in work in the three months to July increased by a healthy 236,000 to 29.6m, with London accounting for 91,000 new jobs. But we are increasingly becoming a nation of part-time workers, with 8.12m people working part time - a record high. The public sector jobs purge continues, with the number of public sector workers falling for the 11th consecutive month. And there are few inroads being made into the problem of the long-term unemployed, with 904,000 people out of work for more than a year - the highest level for 16 years.
