Economics

Interest rates The Bank of England has decided to keep interest rates on hold at 5 per cent for the fifth month in a row.

House prices fell by 1.8 per cent in August. after a 1.7 per cent drop in July and a 1.9 per cent fall in June. The average house price is now 12.7 per cent, or more than £25,000, lower than in August last year, according to figures from Halifax.

Shares Britain’s leading share index fell sharply to close down 137.6 points at 5,362.1, a drop of 2.5 per cent. Forecasts of lower growth in the eurozone and some downbeat data from the US caused banks and dollar-facing companies to suffer.

The economy The United Nations Conference on Trade and Development forecast that the UK economy will grow by 1.6 per cent this year, barely half of the 3 per cent recorded in 2007. It did not give a forecast for 2009.

Eurozone interest rates The European Central Bank kept interest rates on hold at 4.25 per cent as Jean-Claude Trichet, the ECB President, said the Bank would not get eurozone inflation back on target until 2010. The ECB also released projections forecasting higher inflation than previously expected and lower economic growth for this year and next.

German industrial orders fell for the eighth month in a row in July. Orders declined by 1.7 per cent, confounding analysts’ expectations of a 0.4 per cent rise. In June, industrial orders had dropped by 2.6 per cent, revised figures showed, less than the initial estimate of 2.9 per cent.

The US services sector rebounded in August, expanding for the first time since May, new figures suggest. The Institute for Supply Management said its non-manufacturing index came in at 50.6 for August, from July’s 49.5. A reading above 50 signals expansion.

US unemployment The number of Americans claiming unemployment benefits for the first time rose by 15,000 to 444,000 in the week ending August 30.

The rouble Russia’s central bank sold up to $4 billion (£2.26 billion) to break the rouble’s fall. The currency slipped to 30.41, its lowest since the composition of its euro-dollar basket was set at ¤0.45 and $0.55 in February 2007 and taking its losses for the past two days to about 60 kopeks, or 2 per cent.

Banking & finance

Standard Life, the insurance group, said that it had appointed Jackie Hunt, formerly chief finance officer at rival Aviva’s Norwich Union unit, to the new role of deputy finance director. She will take up the job in January.

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