Asia Slowdown to Have `Serious’ on Affect Europe, Economy Chief Rehn Says

Slower economic growth in China, India or other Asian economies would have a “serious negative impact” on Europe’s growth, the European Union’s economic chief said.

Olli Rehn, the EU commissioner for economic and monetary affairs, said yesterday in a Bloomberg Television interview that a slowdown in the U.S. recovery and turmoil in the sovereign debt markets also could cause concern in Europe.

Strengthening global growth helped Europe’s economy show the fastest expansion in four years in the second quarter after the Greek budget crisis earlier damped confidence in the euro currency and forced governments to step up deficit-cutting measures. Euro-area growth is likely to decelerate in the second half of the year as signs of a slowdown in the U.S. and China dim export prospects.

In the U.S., the world’s biggest economy, the Commerce Department may revise lower its second-quarter growth rate to the slowest since the recovery began, according to the median forecast of economists in a Bloomberg News survey. China’s expansion eased to 10.3 percent in the second quarter and industrial production cooled more than forecast in June, data showed last month, signaling a deeper second-half slowdown.

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Household finance under pressure in August

http://www.bbc.co.uk/news/business-11053227

Household finances came under pressure on all fronts in August, according to market researchers Markit and YouGov.

Their survey of 2,000 households showed people were increasingly worried about losing their jobs and higher costs of living.

The Household Finance Index suggests individuals are feeling few benefits from the growing economy.

Some 30% of polled households said their finances had worsened, compared to 6% who said they had improved.

Nearly 69% of respondents reported a rise in the price of their goods and services in August from July, the highest level since the survey began 18 months ago.

Tim Moore, economist at Markit, said: “Stronger growth in the UK economy has done little to put a floor under the downturn in household finances.”

Emerging economies alter dynamics of oil demand

http://www.ft.com/cms/s/0/a6b6d93a-abc0-11df-9f02-00144feabdc0.html

Emerging economies have upended the long-standing pattern of global oil consumption, according to the west’s energy watchdog, in a further sign of how countries such as China and India are transforming commodities markets.

The International Energy Agency estimates that oil demand was higher this year during the second quarter for the first time, at about 86.6m barrels a day, ahead of the traditional peak winter season of January-March, at 86.0m b/d.

But with growing demand for oil coming from countries such as China, India, Saudi Arabia, Brazil and Indonesia, seasonal patterns are changing, a trend the Paris-based IEA believes will accelerate.

The IEA said: “This emerging seasonality will probably raise new refining and logistical challenges.”

In the past, oil demand fell 1.5-2.0m b/d between the first and second quarters, allowing refineries to undergo maintenance. Low demand periods helped to build inventories to meet peak consumption later.

Russian grain ban angers traders

http://www.ft.com/cms/s/0/4a47ed9a-a898-11df-86dd-00144feabdc0.html

Workers at Novorossiysk, a sprawling port on Russia’s Black Sea coast, were rushing at the weekend to load a last ship with grain before an export embargo kicked in.

Analysts said the embargo had enraged grain traders and ports that have flourished during bumper harvests in the past two years. “Everything was working like a Swiss clock – and then it was stopped in one minute by a decree,” said Dmitry Rylko, the director of the Institute for Agricultural Market Studies, a Moscow-based consultancy.

Moscow announced the grain export ban early this month as an extreme heatwave and drought destroyed more than one-fifth of Russia’s grain crops and wildfires swept across the European part of the country.