Data showed on Wednesday that eurozone inflation slowed in December as expected underlining market expectations that price growth will decelerate further in the first months of 2012 and create room for more interest rate cuts for assisting the weakening economy.

Consumer prices in the 17 countries sharing the euro rose 2.8 percent year-on-year in December, down from 3.0 percent year-on-year rises in November, October and September, according to estimates from the European Union’s Statistics Office (Eurostat).

Inflation peaked at 3 percent and should fall back below 2 percent, which is the medium-term target of the European Central Bank, around April according to many economists.

Tags: European Central Bank, eurozone, inflation, interest rate cuts, market expectations

Capping a late-year upswing, manufacturing grew at its fastest pace in six months in December but a European slump and rising oil prices posed threats to the U.S. economy in 2012.

The Institute for Supply Management’s index of national factory activity hit its highest level since June and came in above forecasts at 53.9, more evidence that the U.S. economy picked up steam in the fourth quarter.

“It’s a pretty decent report overall,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. “We’re not roaring ahead here, but it’s also not collapsing. That’s consistent with our overall view of the economy in 2012.”

Tags: factory activity, oil prices, RBC Capital

The idea of cities, towns, and tourist attractions that generally recruit a celebrity to switch on their Christmas lights has changed for this year’s festive decorations for The Holburne Museum in Bath.

Acclaimed lighting expert Bruce Munro has came up with the idea of stunning Field of Lights is the work that will be seen by the public for the first time.

The seed for inspiration of Bruce Munro to create this artwork was planted nearly 20 years ago while travelling in Australia.

‘I hope the Holburne’s visitors and Christmas shoppers in Bath will enjoy Field of Light,’ said Munro.

Tags: Bruce Munro, Christmas lights, Christmas shoppers, festive decorations, Holburne Museum, lighting expert

Investors are ditching whatever hopes they once had for a conclusive solution to the debt crisis after another week of confusion and turmoil in Europe.

Doubts rose about whether Greece would back 130 billion-euro bailout just weeks after it seemed leaders had drafted a master plan to solve the crisis.

From news.yahoo.com:

Disaster may have been averted when Greece, under fierce EU pressure, agreed over the weekend to form a new government that would approve the deal and stave off bankruptcy.

But that did little to calm investors, who were already looking ahead to the next problem: Italy. Italian bond yields hit a euro-era high of 6.4 percent Friday, raising fears the country may soon need a Greece-style emergency bailout.

The Greek agreement “may spark a brief relief rally,” said Alan Ruskin, head of global G10 currency strategy at Deutsche Bank. “But it won’t last and we will soon go back to focusing on Italy.”

“At the end of the day, it does seem like a grand plan is elusive at best,” said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut.

Tags: bailout, currency strategy, debt crisis

The foreign exchange (forex) reserves of India dropped by $1.22 billion at $311.48 billion for the week ended September 30 to register a sharp decline for the second straight week largely due to revaluation of non-dollar assets, official data showed.

During the week ended September 23, the forex reserves had slumped by $4.05 billion.

From in.finance.yahoo.com:

The country’s foreign exchange reserves kitty has shrunk by $9.30 billion in the last four weeks after swelling to an all-time high of $320.78 billion for the week ended Sep 2.

Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.23 billion to $275.69 billion during the week under review, according to the weekly statistical supplement of the Reserve Bank of India (RBI), the country’s central bank.

The foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.

The value of gold reserves, however, rose by $348 million to a record high of $28.66 billion.

Tags: Foreign currency, foreign exchange, foreign exchange reserves, forex

The rich should be taxed more, according to Indian Union Home Minister P. Chidambaram.

The minister, who was earlier the Finance Minister of the country between May 2004 and November 2008, however, said that many people would not like this.

From in.news.yahoo.com:

Addressing a function of the All India Management Association here, Chidambaram said: “We must raise the tax revenue to defend (the expected aggregate decline of resources). I know many people won’t like this. But I think, I can summon the courage to make the statement.”

“I am (was) the Finance Minister who slashed your tax rates. Therefore … you must be prepared to pay higher tax rates, especially the rich must be prepared to pay higher tax,” he added.

Chidambaram, who as Finance Minister of the country was credited with presenting a ‘dream budget’ in the initial years of his tenure, further in Europe rich people were getting together to say: “Please tax us more.”

Chidambaram also said that poverty must decline rapidly and at a higher rate than the current one percent, if the country has to achieve inclusive growth in the future.

“Poverty must decline. The rate at which poverty declined in the first years of liberalisation was about 0.8 percent a year. We believe it’s now declining at about one percent a year. Poverty must decline at a higher rate,” said Chidambaram.

Tags: finance, tax rates, tax revenue