WORLD NEWS

Bleak all Over

British joblessness at 12-year high of almost 2 million
Unemployment in the U.K. surged by 146,000 in the last quarter of 2008, bringing joblessness to 6.3%, or 1.971 million, the highest in 12 years. The figures released by the Office for National Statistics were slightly better than the predictions of many analysts, who expected that unemployment had reached 2 million. Telegraph (London) (11 Feb.)

Cost spikes to insure Japanese bonds against default
Japan's deteriorating economy has driven the cost of insuring corporate bonds against default to the highest point recorded. Data from BNP Paribas show an increase of 25 basis points in the Markit iTraxx Japan index of credit default swaps on debt securities of 50 investment-grade companies in the past two days. Bloomberg (12 Feb.)

Agency predicts sharp decline in energy demandThe International Energy Agency predicted that the world's demand for energy this year will fall the most since 1982. The forecast prompted the price of oil in the U.S. to decline 4.3%. At the same time, a U.S. government report shows that crude-oil inventories have increased more than analysts expected. Reuters (11 Feb.)

Recession prompts BoE to pump money into economy
Bank of England Governor Mervyn King unveiled economic forecasts that are more dismal than those of the Treasury and declared that the U.K. is in "a deep recession." The development led the bank to forgo its rule book on monetary policy and prepare to purchase large sums of assets, such as government bonds. Financial Times (11 Feb.)

Sweden cuts interest rate to unprecedented 1%
Since December, the Riksbank has lowered its interest rate from 3.75% to 1% as it strives to curb the deepening recession in Sweden. The rapid reductions have added to growing panic as unemployment increases, economic growth shrinks and deflation looms. Financial Times (11 Feb.)

South Korea drops interest rate to record low
Lee Seong Tae, governor of the Bank of Korea, said another reduction in the interest rate is possible after the central bank cut its rate to 2%. "The possibility of a further rate cut is still open," Lee said in Seoul, South Korea. "We can also take various other steps to provide liquidity." Recession is looming in South Korea for the first time since the Asian financial crisis of 1997-98. Bloomberg (12 Feb.)