Morning business round-up: Eurozone economy contracts


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

The economy of the eurozone shrank 0.2% in the three months from April to June compared with the previous quarter.

The figures from Eurostat covering the 17 countries that use the euro followed zero growth in the previous quarter.

Europe's biggest economy, Germany, grew by 0.3% in the second quarter, helped by exports and domestic consumption.

France announced its economy had recorded zero growth in the period, which was better than had been expected.

In other economic news, India's wholesale price index slowed again in July, rising 6.87%, which was lower than had been expected.

That figure is down from 7.25% in June and 7.55% in May.

The slowing inflation was largely due to fuel prices, although the rises in food prices also slowed slightly.

While inflation is still higher than the government would like, the figures make an interest rate cut more likely in September, when the next Reserve Bank of India decision is due.

The UK was not so fortunate, seeing consumer prices rise by a surprise 2.6% in July.

The annual inflation rate as measured by the Consumer Prices Index (CPI) had stood at 2.4% in June, the Office for National Statistics said.

The rise in the rate of inflation, which indicates how fast prices have risen in the past 12 months, was due to higher air fares and housing costs.

Less discounting at retailers because of bad weather also helped push up the headline figure.

It was the first time since March that the CPI figure had risen.

Media caption,
Biz Heads

In company news, Focus Media, the Chinese advertising firm accused of accounting fraud, has received an offer from its chief executive and a group of private equity firms to take the company private.

The consortium has offered $27 a share, valuing the firm at $3.5bn.

Focus Media, which is listed in the US, has been accused by research group Muddy Waters of overstating its assets.

The firm's shares have fallen more than 60% since hitting their peak in 2007.

And pensions and savings firm Standard Life was one of the biggest risers on London's FTSE 100 index, climbing nearly 7% in morning trade, after it reported operating pre-tax profits of £302m ($474m) for the first half of the year, an increase of 15%.

The UK figures were particularly strong, with pre-tax profits up from £87m in the first half of 2011 to £141m this year.

Earnings from its Canadian operations fell back, however.

The latest Business Daily programme from the BBC World Service comes from Finland, the eurozone's most northerly country and one where there is resentment about the bailouts of struggling nations such as Greece.

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