Business

Morning business round-up: Australia cuts rate to 3.25%

  • 2 October 2012
  • From the section Business

What made the business news in Asia and Europe this morning? Here's our daily business round-up:

The Reserve Bank of Australia (RBA) has unexpectedly cut its official interest rate, saying global growth was weighing on the country's economic outlook.

The bank cut its key rate by a quarter percent to 3.25%, the lowest rate in three years.

It is the first cost of borrowing cut since June.

The central bank said the strength of the Australian dollar as well as weak export prices justified the move.

India's Kingfisher Airlines has suspended flights for three days, until 4 October, after a strike by workers raised safety concerns.

Kingfisher cited incidents including violence, criminal intimidation and refraining from attending work. It has declared a partial lock-out.

The government said the airline could not fly until its planes were certified safe after the strike.

In other aviation news, Boeing has secured its largest order from a South American airline, in a deal worth up to $6bn (£3.7bn).

Brazilian low-cost carrier Gol is to buy 60 of Boeing's forthcoming narrow body 737 Max aircraft, with the first due to be delivered to it in 2018.

Gol said the new planes were 13% more fuel-efficient than its current fleet and would help to cut its costs.

The airline is currently reducing its workforce by 2,500 jobs, or 12%, as it seeks to return to profitability.

South Korea's Samsung can sell its Galaxy Tab 10.1 tablet computer in the US again after a block on sales was lifted.

District Judge Lucy Koh gave a court order rescinding a ban on US sales that was part of a patent dispute with Apple.

Apple and Samsung, the two market leaders in the lucrative smartphone market, are embroiled in patent disputes in as many as 10 countries.

And there's news of another legal dispute from New York, where the Attorney General has sued JPMorgan Chase for allegedly defrauding investors who lost more than $20bn (£12bn) on mortgage-backed securities sold by Bear Stearns.

JPMorgan bought the investment bank Bear Stearns in March 2008.

It said that it would contest the allegations.

This is the first action to come out of a working group created by US President Barack Obama looking into the causes of the 2008 financial crash.

And in the UK, the British Chambers of Commerce (BCC) has said it thinks official assessments of the health of the country's economy are too gloomy.

According to government statistics, the UK economy has been contracting for nine months. Figures for the third quarter of 2012 are not yet available, but the BCC says that based on its survey of 7,593 firms, the UK economy grew by 0.5% in the July-to-September period.

"Despite official estimates, we believe the economy is still growing, but it is slowing," said BCC chief economist David Kern.

Among other topics, the latest Business Daily podcast from the BBC World Service looks at how computing is replacing cocaine as the key industry in Colombia's second city - and how the real threat to India's street sellers may not be from Tesco or Walmart, but from within.

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