Tata 'to inject cash into Jaguar'

Tata Motors, the owner of Jaguar Land Rover, is to inject "tens of millions" of pounds into the British carmaker, according to the Financial Times.
A spokesman for Tata Motors did not deny the report.
A cash injection by the Indian owner would give the UK government more time to decide whether to use public money to bail-out the company.
Business Secretary Lord Mandelson had cast doubt on a bail-out, saying the state was a "lender of last resort".
Debasis Ray, head of corporate communications for Tata, did not not deny the report but would not say say how much money would be injected.
"It is our company and we are running a business," he said.
"Discussions with the government, however, are confidential and cannot be revealed. We have to run the company and are doing so to the best of our abilities."
State aid
The carmaker has asked the government for financial support and its case has been backed by unions which say the industry needs help.
Labour peer Lord Bhattacharyya had suggested ministers were discussing a £667m loan package for Jaguar.
But Lord Mandelson said that Tata group must "look to their own resources."
Jaguar Land Rover has been hit hard by a dramatic slump in sales that has affected carmakers across the world.
In the US, the government has agreed to a $17.4bn (£11.6bn; 12.4bn euros) bail-out package for Chrysler, Ford and General Motors.
In the UK, the Confederation of British Industry has said urgent government loans are needed to preserve 800,000 UK jobs in the carmaking industry. The Unite union says tens of thousands of skilled jobs are "hanging by a thread".

Bank 'did not understand crisis'

The Bank of England did not understand the severity of economic problems before the current financial crisis, its deputy governor says.
Sir John Gieve told the BBC that the Bank knew "crazy borrowing" was taking place and the price of houses and other assets was rising unsustainably.
But the Bank thought this problem was less serious than it turned out to be, he said in an interview for Panorama.
The Bank relies too much on interest rates to control the economy, he added.
Sir John, who will be stepping down next year, also sits on the Bank's interest rate-setting committee.
In the interview with BBC business editor Robert Peston, he said interest rates were "a blunt instrument", because they affected the whole economy.

Commercial future
Sir John has specific responsibility for financial stability.
He was savaged when interrogated last autumn by the Treasury Select Committee for allegedly being insufficiently on top of the crisis at Northern Rock. His colleagues regarded the attack as unfair.
In his BBC interview, he cast doubt on whether the exchequer would get all of the money back that it has pumped into the banking sector.
"There are some books: Northern Rock, Bradford & Bingley, which the taxpayer's now holding, which clearly have a level of defaults in them, [I'm] not quite sure how that will balance out against the residual of the capital," he said.
"As for the more mainstream banks, yes I think they've got a commercial future and I'm sure that in time they will... revive and start building and growing as commercial entities again."
Meanwhile, the boss of Barclays bank tells the programme that consumers and companies will continue to find it difficult to access credit for the next one to two years.

Miner Rio Tinto cuts 14,000 jobs

The world's third-largest mining firm, Rio Tinto, is cutting 14,000 jobs as part of plans to reduce its debt by $10bn (£6.8bn) by the end of next year.
It also plans to defer some of its planned spending on exploration and combine its two London offices.
Rio Tinto, which is listed in the UK and Australia, currently employs 97,000 people worldwide.
It said it was responding to "the unprecedented rapidity and severity of the global economic downturn".
In the past few months, Rio Tinto has been fending off a takeover approach from rival BHP Billiton, which finally abandoned its offer in November.
Price moves
Rio Tinto said that closing one of its London offices would not necessarily lead to job cuts. Less than 2% of its workforce are based in the UK.

It said that the job cuts would comprise 8,500 contractors and 5,500 employees.
As a global miner, Rio Tinto is very sensitive to commodities prices and exchange rates.
It benefited from soaring metals prices in the first half of the year, but has since suffered as they have fallen back.
But falling oil prices have been good news for it - a $1-a-barrel fall in the price of oil adds about $11m to the group's earnings.
Debt problems
Rio Tinto's shares rose about 10% in early trading on Wednesday to nearly £14 a share, although they are still well off the year's high above £70 a share.
Analysts say the level of its debt has been one of the factors depressing the company's value.
"Their share price has been really slaughtered because of that debt and the BHP bid falling over," said Peter Chilton at Constellation Capital Management in Sydney.
"Probably the biggest issue is the net debt they have got."
Its net debt stands at almost $40bn, which will be more expensive to finance in future as a result of the credit crunch.
But there is some concern that cutting back on spending on exploration will hit growth prospects.
"This goes a long way to ensuring they have enough cash over the next two years to make their debt payments," said Glyn Lawcock at UBS in Sydney.
"The question now is which projects they have to give up. That will determine the growth prospects for the company and its relative attractiveness."

UK economic slowdown 'worsening'

The UK economy contracted 1% between September and November, the National Institute of Economic and Social Research (NIESR) has estimated.
This fall followed after a 0.8% drop in the three months to the end of October, said the think tank.
Indicating that the rate of output decline is "accelerating", the NIESR now expects a fall of more than 1% in the last three months of the year.
Official data showed that the economy shrank 0.5% from July to September.
But it will not be until January that the Office for National Statistics reports on the final quarter's GDP.
If it reports a decline for the three months to December, then the UK will be in officially in recession under the generally accepted definition of two consecutive quarters of decline.
The NIESR says it has a good track record in forecasting GDP growth in advance of the official figures.
'Real risk'
The latest data from NIESR is just the latest indication that the UK economy is most probably falling into a recession.
The main problem the government needs to address very urgently is the availability of bank credit,
NIESR
Prime Minister Gordon Brown has already warned that this is likely.
NIESR said the recession could be deeper than first thought.
"The Government faces the real risk that, despite the [stimulus] measures it took in last month's Budget, output will fall more sharply than it expected to the end of next year," it said.
"The main problem that it needs to address very urgently is the availability of bank credit, and further interest reductions are unlikely to have much effect."
In addition to the recent cuts in interest rates, the Bank of England and the government have given the UK's banking sector billions of pounds in loans to try to restore lending levels to normal.
In response, banks such as Royal Bank of Scotland, Lloyds TSB and HBOS have all announced measures to increase lending to small firms.
The Organisation for Economic Co-operation and Development (OECD) also warned last week that the UK faces a "severe" economic downturn in 2009.
The Paris-based body predicted that economic output in the UK will fall by 1.1% next year, more than any other major G7 country.
It added that unemployment in the UK will likely rise significantly to over 8% by end of 2009 from 5.5% in 2008.

China factory output down sharply

China's manufacturing output fell sharply in November, just the latest sign that the global economic slowdown is impacting on its economy.
The official purchasing managers' index declined to 38.8 in November, from 44.6 in October, with any figure under 50 indicating a contraction.
The fall was caused by a sharp drop in new orders, especially from abroad.
China's President Hu Jintao has warned that the global financial crisis is hitting the country's competitiveness.
'Grim month'
"Another grim month for China manufacturing and the first in which the weakness in overseas demand overtook what, until now, has been mainly a domestic slowdown," said Eric Fishwick, head of economic research at CLSA.
The latest official figure from the China Federation of Logistics and Purchasing was the worst since the data was first published in 2004.
Government economist Zhang Ligun said the economy was now "slowing down at an accelerating rate".
The annual rate of Chinese economic growth has now slowed to 9%, with economists predicting it may fall to as low as 7% in 2009.

Japan set to tackle lending costs

The Bank of Japan (BoJ) will hold an emergency meeting on Tuesday to tackle rising corporate borrowing costs amid Japan's deepening economic crisis.
The Bank is coming under increasing pressure to fund money markets more aggressively as market rates increase due to the effect of the credit crunch.
Borrowing costs are rising at their fastest rate since Japan's financial crisis ten years ago.
Analysts now believe the BoJ will trim interest rates by the end of March.
"Although the level of interest rates [charged to companies] is somewhat lower than in 1998 and 1999 when corporate financing experienced a period of increased pressure, the so-called credit crunch [and] the pace at which these rates are rising is comparable to that in 1998 and 1999," said BoJ governor Masaaki Shirakawa.
Bleak outlook
The economic climate in Japan is worsening.
Japanese industrial output and consumer spending has fallen heavily, spurring fears that the country is heading for a deep and prolonged recession.
Mr Shirakawa said the data pointed to the possibility of deflation, with Japan's consumer price index turning negative, albeit briefly, in the fiscal year beginning 1 April 2009.
Last week's figures showed industrial production fell by 3.1% in October compared with the previous month, much faster than expected.
Year-on-year consumer spending fell by 3.8% in October, also much faster than analysts had expected for the world's second-biggest economy.
Calming markets
Despite the bleak prognosis, Mr Shirakawa moved to calm speculation Japan could see an imminent interest rate cut, saying a further cut could negatively affect the operation of money markets.
But several analysts are anticipating a key rate cut by March 2009, the end of the current financial year.
Hiromichi Shirakawa, chief Japanese economist at Credit Suisse, said there could yet be a cut by the end of the year if the Bank of Japan drastically downgraded its view on the economy.
Japan's base rate stands at 0.3% after it was cut from 0.5% in October, the first rate reduction in seven years.
Japan's economy had experienced its longest period of economic growth since World War II until the sub-prime crisis started a year ago.

World economy 'weakest since 30s'

The United Nations says the world economy faces its worst downturn since the Great Depression.
It expects world economic output to shrink by as much as 0.4% in 2009, due to a slump among developed countries - particularly the US and in Europe.
This would mark the world economy's first year of contraction since the 1930s, the UN said.
The report added there had been complacency about the impact of the financial crisis on poorer countries.
"It seems inevitable that the major countries will see significant contraction in the immediate period ahead and that recovery may not materialise any time soon, even if the bail-out and stimulus package succeed," it says.

The UN expects developed economies to shrink by up to 1.5%, while developing nations should expand by at least 2.7%.
But because of higher population growth in developing countries, income per capita for the world as a whole is expected to fall in 2009.
And the slowing of growth in the poorest countries "suggests a significant setback in the progress made in poverty reduction in many developing countries over the past few years."

Pessimistic
The UN's World Economic Situation and Prospects 2009 report gives three forecasts for growth next year - a baseline forecast of 1% growth, a pessimistic scenario of a 0.4% contraction and an optimistic scenario of 1.6% growth.
This compares with growth of 2.5% in 2008 and 3.8% in 2007.
Rob Vos, chief economist at the UN Secretariat and co-author of the report, told BBC News that the gloomy forecast was a distinct possibility unless financial markets calmed down and bank lending quickly returned to normal levels.
"Day by day, we are getting closer to the pessimistic scenario," he said.
The world economy last contracted in the 1930s amid the Great Depression, he added.
Reform
The report said that developed economies have led the downturn, but that the global nature of trade and finance meant that economic weakness had spread rapidly to developing countries.
It warned that the international community had been complacent about the impact of the global financial crisis on poorer countries.
They are facing higher borrowing costs and lower export growth.
The UN also says that the downturn highlights key failures in the international financial system.
The reliance on the dollar as the sole reserve currency poses risks for developing countries, since a collapse in the value of the dollar could have severe effects on their earnings.
The report also calls for increased funding for the IMF and World Bank, greater international policy coordination, particularly in relation to exchange rates, and fundamental reform of the system of financial regulation.
And it says that developing countries need mechanisms to "mitigate the damaging effects of volatile capital flows and commodity prices" including additional funds during downturns when private flows tend to dry up.
The UN usually publishes its annual economic report in January but it brought forward the release of the main chapter to coincide with the UN Conference on Financing for Development in Doha, Qatar.
The conference aims to track progress on development aid given fears that rich countries will cut back on aid as a result of the looming recession.