25/04/2012 World Business Report

Those are the latest headlines. Is it or have not a recession -- is

it a recession or not? We will talk about that Tim World Business

Report. On a knife-edge. Is the UK economy

heading back into recession? Investors look to the Federal

Reserve for hints on the direction of the US economy.

Corporate Japan is expected to report strong results as the

earnings season is in full swing. In the next few hours we will find

out whether the UK has fallen back into recession. An apparent slump

in construction means the services sector will have to report solid

growth if the economy is to avoid a recession. Most economists think

Britain will scrape through with growth in the first three months of

the year at just 0.1%. In the final quarter of last year the economy

shrank by 0.3%. Let me ask you, which can find you bin? I am in the

middle. I am at zero, zero growth for the first quarter. A lot

depends on things, erratic bin is like construction and industrial

output has been very mixed. The services sector is doing quite well.

Really, it is flat. This is just, the Office of budget

responsibility... Revenue will be down for the government. It is

interesting because we want to know what effect this will have on

businesses and consumers. If we do get a technical recession, would

that, does that make people change? It does, I think. The eurozone is

flaring up again in terms of problems and it will probably have

a recession this year. For the UK to slip into recession, even if it

is only tiny... we are looking at growth of 0.4%, it is not great but

it is better. We have had, let's be fair, we have had some better

economic news in recent times. The unemployment rate coming down and

we have seen a bit of a boost in retail sales. It is not complete

legal armour. No the underlying growth is there. Things will

disturb it in the second quarter. The Queen's Jubilee holiday. Don't

forget about the gas leak in the North Sea. That will have an impact

for the first quarter but a larger impact on the second quarter. It is

not until the third quarter with the Olympics that it will look like

we are starting to grow. As well as that it is often the case that when

we get provisional numbers they are often revised. We shouldn't perhaps

get too carried away with the first number. The Office of National

Statistics is under some pressure anyway because a lot of the numbers

coming out from them have to be revised. We look at this number, we

might be in recession. By next quarter we might be out of it. The

UK economy is not growing enough for us really, even if we are

forecasting 0.4% growth for the rest of the year.

The Federal Reserve will have plenty to say about the US economy.

That is when its policy meeting ends on Wednesday. We are expecting

a statement, a forecast and a news conference. There is not much

chance of a shift. 12 people are meeting in this

building. They sit on the committee that controls the supply of money

and credit to the US economy. This time around they are wrestling with

signals pointing in opposite directions. With inflation rising a

bit faster than anticipated thanks to higher oil prices but an economy

that risks losing momentum it is a tricky balancing act. We don't

think this will be a meeting when we will have the Fed trying to send

a strong signal about changing direction. It is about doing the

outlook for the economy, the risk, financial developments going

forward. The elephant in the room is jobs. More jobs is good news for

workers and Royce but could make the task of controlling price rises

more difficult. It obviously affects how you do you the amount

of slack in the economy, relevant for future inflation. This is the

New York Federal Reserve. The staff here implement many of the

decisions taken in Washington. It is not likely they will get any

extra work to do so soon. The chances are the policy workers will

decide to sit tight and in effect do-nothing until they know whether

the economy will get worse or better.

We go to Singapore now and will look at the Japanese earnings a

season which is under way. Everyone has been focusing their

eyes on the US earnings this season and it has been better than

expected so far. Now everyone is looking at the third biggest

economy and how they will fare after the earthquake, tsunami and

the nuclear disaster in March 2011. The key point is Canon. They are

expecting to post a strong profits with a rise of about 20% compared

to year ago levels. Excuse me. Investors also expect the rest of

the country's N's to be on the rebound. This is being reflected by

stock valuations. They expect to see a jump of nearly 70%, far

better compared to the US companies. That is basically compared to a

loss of almost one-third of last year after the country was hit by

the triple disaster. Analysts say corporate earnings are definitely

on the mend. I do not know why I am coughing, and there seems to be

something in my throat. In spite of the more positive outlook, Alice

say there are several risks are lurking in corporate Japan. --

analysts say. The currency is still strong which is a drag on growth

and competitiveness. You did brilliantly. Thank you for

persevering. We will look at some of the other

stories making the headlines. The world's most valuable company,

Apple, has reported another jump in sales sending its share price up by

7%. Profits almost doubled in the first three months of this year.

Apple has sold more than 35 million iPhones in the quarter and nearly

12 million iPads. Investors had been fearing the worst after the

share price fell by 13% in the last couple of weeks.

The US justice department has made the first arrest in at the BP while

Max Bill Kay's. An engineer has been arrested on charges of

destroying evidence. In Asian markets not a bad