German industrial production surged unexpectedly in November by the biggest amount in two years, providing a ray of hope for Europe's troubled largest economy.
The news comes ahead of a European Commission report into the eurozone, which is said to claim that it has a competitiveness problem.
Germany is close to recession and has been reprimanded by the commission for running too high a budget deficit. Chancellor Gerhard Schröder is having to force through tax increases to try to balance the books.
According to the economy and labour ministry, industrial production was up 2.5pc in November compared with October.
Meanwhile, Sir Edward George, Governor of the Bank of England, said yesterday that the world economy would grow steadily this year.
Speaking after the monthly meeting of G10 central bankers at the Bank of International Settlements in Basle, he said: "We are seeing slow but relatively steady growth in the world economy in 2003."
He said he did not want to speculate on the impact of a war in Iraq, but added: "The markets have already anticipated that there will be a war and that it will be short."
Yesterday the price of gold shot up to another six-year high. It closed up $2.50 an ounce at $354.50, the highest since March 1997.
The benchmark price for a barrel of crude oil for delivery in February jumped 43 cents to $30.10 as Norwegian state oil producer Statoil said it had been forced to close two North Sea fields because of technical problems.
The rise in the oil price is hitting manufacturers' profit margins by driving up their costs. Official producer price figures in the UK yesterday showed that although factory gate prices were almost unmoved in December, up 0.1pc on the month, input prices surged 3.2pc as raw materials costs rose.
"With Opec to increase production, the painful spike in input costs should be short-lived," said Ross Walker, an economist at the Royal Bank of Scotland. |
