A week of record lows for interest rates from one side of the world to the next as the Bank of England cut rates to the lowest in 315 years to 1.5%, in the same week that South Korea reduces its rate to a record low of 2.5%.

Some good news on the high street

JD Sports has bucked the trend over Christmas with their sales up by 2.8% and that it expected its full-year profits to be ahead of forecasts. JD Sports has outperformed the FTSE all-share general retailer’s index by 1% over the last year and in September 2008 the company reported – so it is good to see a company on the high street performing well.

The other companies that fared better included supermarkets like Waitrose where sales were up 41% in the week to 27 December. Sainsbury’s also reported a rise in sales of 4.5% (excluding petrol) from last year for the 13 weeks to 3 January and John Lewis’s sales rose by 27.4% in the week to 3 January – so maybe the interest rate cuts are having a positive effect on consumer spending.

UK manufacturing at a low point

The UK’s manufacturing output has fallen to its lowest level for 27 years which shows just how difficult things are right now for the UK economy. The output has fallen by 7.4% year-on-year which is the biggest fall since June 1981. This was reported in the same week as Nissan announces the loss of 1,200 jobs in Sunderland due to the slow down – Nissan’s Sunderland factory was once hailed as the future of British manufacturing.

Record job losses in the US

Job losses within one year in the USA were the worst they have been since the time of World War II with employers axing a staggering 2.6 million posts in 2008, with over half a million of those in December 2008! This level of losses in US jobs puts the percentage of unemployment up to 7.2%! A similar situation is growing in Spain with unemployment hitting a 12-year high in 2008 of 3 million with one million of those unemployed being added to the jobless list in 2008 alone!

A bizarre twist on the car sales front

Car Manufacturer BMW has seen the sale of its Mini brand rise by 4.3% in 2008, whilst the sale of BMW cars has fallen by 4.3%. However, what is strange in an economic slowdown is that sales of Rolls Royce’s is up, with sales of the Rolls Royce Marque increasing to 1,212 in 2008 (2007 1,010).

End of the week saw:
Stock exchanges:
FTSE 100: 4,449
DOW: 8,599
S&P: 890.35
Nikkei: 8,837

Currencies
UK Sterling £ to US Dollar $ 1.52339
UK Sterling £ to Euro € 1.13428
UK Sterling £ to Japanese Yen 137.425
UK Sterling £ to Aus $ 2.15682
US Dollar $ to Euro € 0.744575
US Dollar $ to Japanese Yen 90.2100

Commodities
Nymex Crude oil – $40.39
Gold – $854.50

Trade Minister Lord Jones will seek to boost the future gold prospects of UK firms working in the sporting sector at a series of meetings in Beijing.

Lord Digby Jones said sport was now “big business” and that the Olympics gave UK firms the chance to promote expertise to an international audience.

And he said now was “the right time for UK companies to leverage off the prominence of our Olympic win”.

The ex-CBI boss is part of Gordon Brown’s team “of all the talents”.

Olympic contracts

Lord Jones is bringing together UK businesses with key decision makers from future bid and host cities in the Chinese capital today.

Earlier this year, the government launched Compete For – an online business “dating agency” where companies can be easily matched with potential Olympic contracts.

Lord Jones says “international sporting events are big business”

UK Trade and Investment says that 23,000 UK companies have aleady signed up for the service.

“Now is the time for UK business to start bidding for Olympic contracts for 2012 and beyond,” Lord Jones said.

Friday’s event will bring together decision makers from Madrid, Tokyo, South Africa, Budapest, Rio de Janeiro and Moscow to meet UK firms involved or interested in the global sports sector.

‘Expertise and capabilities’

Lord Jones said: “International sporting events are big business, with billions of pounds worth of contracts up for grabs every year.

“The Olympics will act as a huge catalyst for inspiring businesses to grow and internationalise” Lord Digby Jones

“With all the key decision makers in Beijing it is essential that British businesses can promote their expertise and capabilities to an international audience.

“I am in Beijing with British businesses helping them do just that.”

International sports events make use of a broad range of sectors including architecture, advertising, audio visual, security, logistics, IT and event management.

Lord Jones said British expertise in staging international sporting events was world class.

“The Olympics will act as a huge catalyst for inspiring businesses to grow and internationalise,” he added.

News reported by The BBC

The British buyout of Crown Paints heralds an exciting time for everyone in the Lancashire-based business, its new chairman says.

The deal, backed by UK investment fund Endless and thought to be worth £70m, was agreed with Dutch owner Akzo Nobel.

It will help secure jobs for 600 workers at the firm’s headquarters in Darwen. Crown also has sites in Hull, Warrington, Belfast and Dublin.

Crown’s new owners have promised “significant investment” in the firm.

Workers at Crown’s UK sites were facing an uncertain future after the European Competition Commission ordered the sale of the business earlier this year.

It followed Akzo’s £8bn purchase of Dulux-owner ICI, giving the group more than half the UK paint market.

‘Sales growth’

Crown Paints has annual revenues of about £180m and 15% market share in the UK and Ireland.

Established almost 200 years ago, the company was famous for sponsoring Liverpool Football Club during the 1980s and currently sponsors Blackburn Rovers.

Crown chairman, Graham Hallworth, said: “This is a very exciting time for everyone in the business as we return to independence.

“Crown is an extremely strong brand that is experiencing sales growth and it is essential that we remain competitive in current trading conditions.”

Mr Hallworth said the level of investment from Endless had put the business in a strong position to boost sales.

Endless managing director Warwick Ley said the Crown deal would be “supported by a significant level of investment behind the business”.

The European Commission still has to give approval for the buy-out, which is expected within the next two months.

News reported by The BBC

Commodity prices will not be coming down in the near future, as the industry juggles ever-growing demand from developing economies with rising supply costs, according to the world’s biggest mining corporation.

BHP Billiton, the mining giant stalking British-Australian rival Rio Tinto, reported record profits for the seventh consecutive year yesterday. Annual production records for seven major product lines including petroleum, copper and manganese, alongside 10 new projects on stream, contributed to revenue growth of 25.3 per cent to $59.5bn (£31.9bn), attributable profit up by 14.7 per cent to $15.4bn, and a dividend increase of 48.9 per cent to $0.70.

“Strong demand, with supply-side constraints, resulted in a strong pricing environment for us,” Marius Kloppers, the BHP chief executive, said. “I want to emphasis the unbroken record of increased production, and we will continue this trend in 2009 with an estimated 10 per cent growth next year across the portfolio.”

But rising prices are also affecting commodities groups themselves. Rising energy costs added an extra $371m to BHP’s outgoings, and inputs cost $204m more than in 2006. Some, including coke, sulphuric acid and caustic soda, have gone up by more than 50 per cent since December alone. And while developed economies are slowing, the developing world – most particularly China – continues to show an unstinting appetite for raw materials. China’s construction industry alone will require three billion tonnes of steel within the next 20 years, equivalent to the entire output of Australia from 1963-2007, according to BHP.

“While the short-term outlook in developed economies remains uncertain, the longer-term fundamentals remain absolutely intact,” Mr Kloppers said. “Industry analysts are taking insufficient notice of supply-side issues and they will continue to be a key determinant in commodity prices going forward. That was my message in February and it is my message today.”

BHP’s strong financial performance is not just riding on high commodity prices. The company produced 13 per cent more petroleum, adding $1.1bn to the division’s revenues and pushing its earnings before interest and tax (Ebit) up by 82 per cent. Manganese was another stellar performer, with Ebit up a massive 549.8 per cent. The strong figures helped to offset dips in other product areas including aluminium, hit by power supply problems in South Africa, and metallurgical coal, disrupted by major flooding in Queensland.

As Mr Kloppers stressed BHP’s resilience and scale, the City showed similar confidence. Simon Toyne, an analyst at Numis Securities, said: “While a sustained upwards movement in BHP’s and/or the sector’s share prices will be difficult in the face of deteriorating macro data, both absolute and multiple-based valuation measures of BHP look cheaper than we have witnessed since 2001/02 and it remains our preferred stock in the sector.”

News reported by The Independent