FED CAUTIOUSLY OPTIMISTIC ON US ECONOMY - Last night the US Federal Reserve said it appears that the American economy has ended the longest period of decline since the Great Depression, but it cautioned that economic activity will remain weak in the near term. It left its key overnight interest rate at a 0-0.25% range, as expected, and it said 'economic activity is levelling out' and household spending is stabilising.
Pierre Ellis, of Decision Economics in New York, says all the news last night from the Fed was not positive and says there is an extra spanner in the works. Explaining that the Fed has a list of risks to consumer spending, he says that last month there were three items on this list, but last night the Fed added a fourth - sluggish consumer incomes. He says this is key as many people would regard it as being the most important factor in determining consumer spending. He says the Fed has been looking at the behaviour of wages and it is seeing risks where there had been none before.
The economist agrees that the US economy is starting to make a recovery but it is a very faint one. He says the Fed is saying that the downside risks to the economy remain at least as powerful as the upside risks and it is watching for the potential for things to go wrong.
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GREENCORE PLANS TO EXPAND UK PRESENCE - Food group Greencore has an interim management statement out today. It says the performance of its convenience food sector has continued to improve as the year goes on. While the sale of cakes and puddings has fallen, there has been a pick-up in the sale of prepared meals and sauces. It says it is extending its presence in the UK, though the environment there is difficult. Liam Carroll owns 29% of Greencore. It is yet to be seen what is going to happen with that shareholding, and others he has in companies like ICG and Aer Lingus.
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MORNING BRIEFS - United Drug has agreed a deal with Medco Health Solutions to provide home-based pharmacy care services in the UK for patients covered by the country's National Health Service.
*** Uplifting figures out this morning - the French and German economies both grew by 0.3% between April and June, bringing an end to the recessions in Europe's two biggest economies. The rise in GDP in Germany was led by mainly by increases in private and public consumption. The German economy had been in its sharpest recession since World War II, with GDP falling consecutive quarters. In France the Economy Minister Christine Lagarde said the data was very surprising, that after four negative quarters France is finally coming out of the red.
*** On the currency markets today, the euro is trading at $1.4220 cents and 86.01 pence sterling.
