Linda Young – AHN News Writer
London, United Kingdom (AHN) – The Bank of England will inject an additional $117.7 billion into the economy in an attempt to encourage commercial bank lending and stimulate sagging growth. That decision was reached by the Bank of England’s Monetary Policy Committee when it met and voted on Thursday. The move boosts the amount of the bank’s asset purchase program, financed by issuance of central bank reserves, to $431.7 billion, bank officials said. Businesses in the United Kingdom welcomed the move. In a statement, the bank’s Monetary Policy Committee explained why it acted. “The pace of global expansion has slackened, especially in the United Kingdom’s main export markets. Vulnerabilities associated with the indebtedness of some euro-area sovereigns and banks have resulted in severe strains in bank funding markets and financial markets more generally. These tensions in the world economy [...] Continue Reading…

Vittorio Hernandez – AHN News
Paris, France (AHN) – France registered an inflation rate of 2.4 percent in August, up from 2.1 percent in July. It is the fastest rate of increase in almost three years following the jump in prices of manufactured goods and cost of energy. The 2.4 percent consumer price index rate was higher than economists’ expectation of 2.2 percent. The rate was calculated on a harmonized European Union method. Manufacturing goods prices rose 1.6 percent and energy prices went up 0.4 percent. However, food prices went down 0.2 percent due to a seasonal drop in fresh produce prices. The European Central Bank raised key lending rates two times in 2011, but last week said the risk of recession is greater than the threat from inflation.

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Linda Young – AHN News Writer
Sao Palo, Brazil (AHN) – Brazil’s central bank cited a “substantial deterioration” in its outlook for the economy and unexpectedly announced a cut in its key interest to 12 percent from 12.5 percent. Rising prices have been a problem in Brazil, and the central bank had raised its key interest rate five times this year in an effort to contain inflation. However, inflation is still running at a six-year high of 7.1 percent. The continued high inflation rate couple with the unexpected cut coming a few days after several politicians had called for a rate cut. Observers say it calls into question the central bank’s independence. Brazil, which is the biggest economy in South America, grew at the rate of 7 percent last year. This year Brazil’s economy is expected to grow at the rate of 5 percent.

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Linda Young – AHN News Writer
Hanoi, Vietnam (AHN) – Inflation surged by 23 percent in Vietnam in August, the highest rate in Asia. Vietnam’s consumer-price inflation index rose by 23.03 percent compared to the same period last year, according to the country’s General Statistics Office (GSO). In July, the CPI rose by 22.16 percent. A representative for the General Statistics Office attributed the increases to higher prices for food and fuel, with prices for food and drink increasing by a whopping 34 percent. In addition, dollar-pegged currencies are causing more inflation in prices of many commodities as the U.S. dollar continues to weaken. The increase in CPI came despite actions taken by the central bank and the government to tighten monetary and fiscal policy to curb inflation and stabilize the economy.

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Vittorio Hernandez – AHN News
Washington, D.C., United States (AHN) – The U.S. Federal Reserve promised on Tuesday that it would hold interest rates at record lows for at least two years. The Fed had held on to the record-low key lending rate since December 2008 to help boost the American economy. The decision was based on a 7-3 vote, which was the first time in 20 years that three Fed members dissented. The three members who dissented were Federal Reserve Bank of Dallas President Richard Fisher, Federal Reserve Bank of Minneapolis President Narayana Kocherlakota and Federal Reserve Bank of Philadelphia President Charles Plosser. Besides holding the interest rate until the middle of 2013, the Fed said it would consider additional measures to support the weak American economy, worsened by Standard & Poor’s downgrade of the country’s credit rating last week to AA+ due to the impasse on [...] Continue Reading…

Vittorio Hernandez – AHN News
Washington, D.C., United States (AHN) – The U.S. Federal Reserve would likely keep the record-low interest rates, Treasury markets indicate. According to a Federal Bank of Cleveland study, the U.S. economy is forecast to grow by only 1.1 percent in the 12 months ending June 2012. That rate is less than half of the central bank’s current forecast and would likely result in delaying any key lending rate increase. The Fed has held benchmark interest rates from zero to 25 basis points since December 2008. Given the slower growth of the American economy, analysts said that the Fed is not likely to hike interest rate until June next year. That would make it the longest period that the central bank has held on to a low key lending rate since the 1940s when the Fed was forced to buy Treasuries. From [...] Continue Reading…

Vittorio Hernandez – AHN News
Frankfurt, Germany (AHN) – The European Central Bank raised on Thursday key lending rates by a quarter point to 1.5 percent. The rate hike aims to curb inflation, said ECB President Jean-Claude Trichet. He hinted of more benchmark rate increases in the future, despite weak economic growth in southern Europe and problems in the bond markets. Trichet made the rate hike announcement even if the ECB had been warned that the increase may be bad for the Spanish and Italian economies. Trichet stressed that all eurozone nations are on the losing end if the regional central bank would fail to rein in price increases through the key lending rate increase. Inflation in the zone hit 2.6 percent in June due to pressure on fuel and food prices. Following the rate hike announcement, yields on 10-year Italian bonds went up to a high [...] Continue Reading…

Vittorio Hernandez – AHN News
London, England, United Kingdom (AHN) – The international banking regulator, the Bank for International Settlements (BIS), urged over the weekend the Bank of England to raise the country’s record-low interest rates. The regulator warned that financial stability of Britain is at risk unless the country’s central bank imposes tighter monetary policy. Although the BIS, in its yearly report released on Sunday, made the same warning to central banks around the world, it singled out the Bank of England because Britain’s inflation rate had exceeded the BOE’s 2 percent target since December 2009. The BIS pointed out that the United Kingdom’s consumer price index has reached 4.5 percent, while the country’s key lending rate continues to be at 0.5 percent since March 2009. The BIS stressed that the BOE’s extremely accommodative policies threaten to embed high inflation in the system and damage [...] Continue Reading…

Linda Young – AHN News Writer
New York, NY, United States (AHN) – Bank of America (BAC Fortune 500) announced it is partnering with two other entities to develop solar energy from rooftop installations. The project will ultimately produce about 733 megawatts of solar energy, which is enough energy to power 100,000 homes and represents about 50 percent of the energy output of a nuclear powered electric plant. A federal loan guarantee through the Department of Energy will help to fund the $2.6 billion project. It will be the world’s largest single effort to install solar energy panels on rooftops. The panels will be installed on the rooftops of industrial buildings in several states. DOE will guarantee 80 percent of the $1.4 billion debt financing. The rest of the money will come from private loan and funding sources. Other partners in the project include real estate owner [...] Continue Reading…

Vittorio Hernandez – AHN News
Washington, D.C., United States (AHN) – More Americans continue to save in banks rather than borrow money from financial institutions. According to latest data from the Federal Reserve, savings in U.S. banks hit a record $1.45 trillion in May. The growing savings has been observed since the global financial crisis in 2008. A similar trend was observed in Japan, where the gap between savings and borrowing is at an all-time high. Japanese banks use the money to purchase bonds to help keep yields the lowest in the world even if Tokyo has more outstanding debts than the U.S. and a lower credit rating. Before 2008, U.S. deposits exceeded loans at an average of $100 billion. Because of the worst recession experienced in the U.S. since the 1930s, consumers trimmed household debt to $13.3 trillion from the 2008 peak of $13.9 [...] Continue Reading…