F1 revs up Singapore's economy

22 September 2011 Last updated at 23:06 GMT By Puneet Pal Singh Business reporter, BBC News, Singapore Chef Ahmad is preparing for one of the busiest weekends of the year for his team Chef Reyaz Ahmad is busy preparing kathi rolls in the kitchen of Go India restaurant in Singapore. It has taken him five minutes to wrap freshly cut greens and grilled chicken flavoured with exotic Indian spices into a toasted roll of bread.

The rolls are one of the best selling items on the restaurant's menu. There is just one problem though.

Chef Ahmad and his team will have to make 12,000 of them over the next three days as the restaurant sets up a kiosk at the Formula One circuit in the city.

The hard work does have its rewards. As many as 18,000 people buy food from its kiosk at the venue during the weekend, making a substantial contribution to its earnings.

"We have a revenue jump of close to 30 to 40% for the month, due to our sales at the Formula One kiosk," Pankaj Tandon, managing director of Go India, tells the BBC.

Winning formula?

Its just not the businesses that are benefiting. The government's investment into bringing Formula One to Singapore is paying off as well.

According to initial estimates, the cost of hosting the Grand Prix is 150m Singapore dollars ($115m; £75m) per year. As much as 60% of that is being invested by the Singapore government through the Singapore Tourism Board (STB) in a bid to attract more visitors to the island nation.

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Because there is so much wealth that comes in this week, the demand for tables at top clubs outstrips supply. The Formula One weekend is the best time to throw a party”

End Quote Michael Van Cleef Ault The Pangaea Group If tourist numbers are anything to go by, the authorities have succeed in their objective.

According to the STB, the country generated an extra S$160m in tourism revenue in 2010 as a result of hosting the race. The figure was S$93m in 2009 and S$168m in 2008.

Analysts say that along with this, Singapore is also reaping intangible rewards.

"After the first year, people stood up and took notice, Singapore just exploded on the world stage," says Ben Heyhoe Flint of sponsorship consultancy Fuse.

"It showcased that the city had a lot more to offer than just being a transit point for trans-Pacific travellers," he adds.

It is little surprise then, that businesses can't seem to get enough of it.

"Formula One has become one of those events which we look forward to year after year," Go India's Mr Tandon says.

"It lets us break away from the regular monotony of a restaurant and get into something much bigger, much larger," he adds.

'World stage' Tables at Pangaea nightclub sold out far in advance of the race weekend

While existing businesses and the government reap profits, new ones are looking to join the bandwagon as well.

Pangaea, one the world's most famous nightclubs, has timed the launch of its Singapore branch to coincide with the race weekend.

With tables priced as high as S$20,000 per night, its not surprising to see why the club is keen to tap in to the Formula One frenzy.

"All the billionaires, the lead corporate chief executives and lots of celebrities are going to be in town for the weekend," Michael Van Cleef Ault, principal of The Pangaea Group, tells the BBC.

"It is a great time to open, because you get a world stage automatically presented to you without a lot of work," he adds.

Despite the high prices, Pangaea is sold out for the entire race weekend and is expecting revenue of as much as S$1m during the period - almost 10% of the total cost of setting up the place.

"Because there is so much wealth that comes in this week, the demand for tables at top clubs outstrips supply," Mr Ault explains.

"The Formula One weekend is the best time to throw a party."

Target achieved?

Singapore's current Formula One contract expires next year. While the venture has been successful, the government has yet to decide whether it wants to renew the agreement.

Analysts say that it will be a tricky decision for the authorities to make.

"Singapore has achieved what it set out to achieve," says Mr Flint of Fuse.

"Whether it wants to build on that success, maintain that profile and carry on the brand further, time will only tell," he adds.

While uncertainty remains about the long-term future of Formula One in the city-state, in the short-term, the car engines are ready to rev up and the fans are in place to set the cash registers at Go India and Pangaea ringing.

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And the Greek minister in charge international economic relations, Constantine Papadopolos, assesses the situation in his country.

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Miliband urges U-turn on economy

25 September 2011 Last updated at 21:19 GMT By Brian Wheeler Political reporter, BBC News Ed Miliband admits his party faces a big challenge to win back votes David Cameron must "start showing some leadership" and "change course" on the economy, Ed Miliband has said.

Speaking as his party gathered for its annual conference in Liverpool, the Labour leader said the coalition's austerity programme was "not working".

And he again called for a temporary VAT cut to kickstart growth: "You can't leave an economy flat on its back."

He also called for a £6,000 cap on university tuition fees to ease the debt burden on students.

Labour is expected to use its week in Liverpool to set out an alternative economic vision, ending what Mr Miliband has called the "fast-buck" economy.

'First step'

Shadow chancellor Ed Balls is expected to step up attacks on the coalition and urge David Cameron and Chancellor George Osborne to change course in his speech to conference on Monday.

Labour remains committed to halving the deficit in four years and concedes there would be spending cuts if they were in power.

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Ed will lead the party in the way that he sees fit, with conviction and purpose - and that's right”

End Quote David Miliband Labour MP But Mr Miliband, who makes his big speech on Tuesday, and Mr Balls say money should be pumped into the economy at the same time to boost growth.

Mr Miliband told the BBC: "As a first step we say cut VAT. Keep to a plan to cut the deficit over four years but do it with growth because that's the only way you are going to achieve what you need to achieve.

He added: "There is an absence of leadership and I say to the prime minister 'put the politics aside, start showing some leadership'."

Brother's backing

Mr Miliband admitted the party faced a big challenge in winning back support at the ballot box.

But he insisted: "We are a party on the way back. There's a long way to go and I, more than anyone, know the scale of task.

"But, you know what's most important? I know who I am and I know where I want to take this country and that's what I'm going to be talking about this week."

And he received a vote of confidence from older brother David, who he beat to the party leadership by the narrowest of margins at last year's Labour conference.

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People will not trust us with power if they don't trust us with money”

End Quote Liam Byrne Shadow work and pensions secretary Arriving at the conference centre, in Liverpool's rejuvenated dockside area, David Miliband told BBC News: "Ed will lead the party in the way that he sees fit, with conviction and purpose - and that's right."

David Miliband confirmed he would be in the US when his brother makes his leader's speech to the conference on Tuesday.

He said it was important he was here on Sunday evening - speaking at a fringe meeting - because "it's very important that all members of the Labour Party rally behind our cause and I'm here to support the leadership".

'Fiscal realists'

Shadow work and pensions secretary Liam Byrne, who is in charge of the party's policy review, said Labour needed to seize the centre ground of British politics - and regain economic credibility.

He told a fringe meeting organised by Labour group Progress: "People will not trust us with power if they don't trust us with money.

"We have to be fiscal realists. We have to be a party, like the government, that says we want to bring the deficit down, but the fiscally realistic thing right now is to get our country back working."

Shadow communities minister Caroline Flint said Labour had "not been comfortable talking about efficiency and saving money".

She said people had come to associate the Conservatives with talk about value for money, adding: "We need to reclaim that ground."

Shadow Cabinet Office minister Tessa Jowell told the meeting people were "just not listening" to Labour because they were focused on "the financial anxieties of managing from one day to the next".

She also said the party had to understand that "people are much more sceptical and much more hostile about the idea of the state spending money on their behalf".

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AUDIO: 'No short cuts' for Greek economy

Greece remains in the front line of the turmoil in the world economy. US treasury secretary Timothy Geithner spoke to Martin Wolf for a forthcoming Radio 4 series, sharing his opinion on the crisis in the eurozone.

And the Greek minister in charge international economic relations, Constantine Papadopolos, assesses the situation in his country.

Get in touch with Today via email , Twitter or Facebook or text us on 84844.

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Oil prices fall on economy fears

5 September 2011 Last updated at 16:20 GMT Continue reading the main story Oil prices have fallen on concerns that the US could fall back into recession, and continuing anxiety about eurozone debt levels.

With fears about a slowdown in China also hitting sentiment, US light crude had fallen $2.40 a barrel to $84.05.

Brent crude was also lower, dropping $1.66 to $110.67 per barrel.

The falls come after data on Friday showed that the US economy added no new jobs in August, a much worse reading than had been expected.

Analysts had predicted that the non-farm payrolls figures from the Department of Labor would show about 70,000 new jobs had been created.

The unemployment rate remained unchanged in August at 9.1%.

In Europe, the main share indexes were down sharply as concerns continue about the high debt levels of eurozone countries, and how these could impact on the wider economy.

Germany's Dax index and France's Cac were both 2.6% lower in morning trading.

Meanwhile, a report in China said that the country's service sector grew in August at its slowest pace since records began.

"Oil is falling on worries over weak demand, unemployment and talk of a double dip recession," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

He added that oil prices would be falling further were it not for growing optimism that the US central bank, the Federal Reserve, will announce new measures later this month to try to stimulate the US economy.

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Scots economy 'shows resilience'

11 September 2011 Last updated at 23:22 GMT Manufacturing production rose at its sharpest pace for four months, according to the survey The Scottish economy is showing resilience in the face of a global slowdown, according to a Bank of Scotland survey.

The bank's latest Purchasing Managers' Index (PMI) indicated Scottish private sector activity expanded solidly in August.

Manufacturing production increased at its sharpest pace for four months.

But the survey also suggested the services sector had its weakest monthly performance since January.

And despite both higher activity and the steepest rise in demand for four months, employment fell for the first time in seven months.

Meanwhile, output prices increased only moderately as Scottish firms absorbed a large proportion of sharp cost inflation.

The bank said growth remained solid and above the UK average rate of expansion, despite slowing slightly as service sector activity growth moderated.

In the rest of the UK, only four of the nine English regions posted increases in private sector business activity in August. London remained the top performing region, despite growth slowing sharply since July.

'Robust' rise

According to the survey, the latest expansion in overall activity in Scotland largely reflected higher levels of new business.

Total new work north of the border increased at its fastest pace for four months, boosted by a "robust" rise in new manufacturing orders.

Overall growth, however, was dampened by only a marginal increase in new business at service providers.

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It is particularly encouraging to see signs that manufacturing output accelerated at its fastest rate for four months”

End Quote John Swinney Sustainable Growth Secretary Bank of Scotland chief economist Donald MacRae said it was an "encouraging" survey.

He added: "This is a welcome result, suggesting the private sector of the Scottish economy grew, albeit slowly, throughout January to August this year.

"Manufacturing output accelerated at the sharpest rate for four months, while new orders received by manufacturing firms increased for the eighth consecutive month.

"There was a particularly welcome rise in new export orders which extended the current sequence of growth to ten months."

He added: "Although the services sector saw growth, it was the weakest monthly rise in activity since January.

"The rate of expansion in services has slowed over the summer, with employment falling for the third month in a row.

"Nevertheless, the Scottish economy is displaying resilience in the face of a global slowdown so far."

Sustainable Growth Secretary John Swinney said: "The report for August shows that private sector business activity in Scotland grew for the eighth month in a row.

"It is particularly encouraging to see signs that manufacturing output accelerated at its fastest rate for four months, with new orders increasing for the eighth consecutive month.

"Overall growth remained solid and above the UK average of expansion. This is underpinned by a solid rise in new orders received by Scottish manufacturing with total incoming new business increasing at the fastest pace since April."

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Jackson Hole Summit to Help Boost the Slowing US Economy

Jackson Hole Summit speech of Federal Reserve Board of Governors Chairman Ben Bernanke on Friday may hint at yet another monetary push to boost the slowing U.S. economy.

However, the Wall Street Journal reported most economists think that such suggestions at the annual conference of economists in this Wyoming resort “are overly optimistic.”

“Bernanke is unlikely to fulfill the markets’ hopes that he will pave the way for a third round of asset purchases (QE3),” economists from Toronto’s Capital Economics wrote in a note Wednesday that was reported in the Wall Street Journal. “And even if he did, QE3 is unlikely to boost the economy, equity prices or commodity prices by as much as QE1 and QE2 [did].”

At last year’s conference, Bernanke unveiled plans for a $600-million round of bond buying, which the Journal said he “essentially unveiled QE2.” The action triggered positive market reaction.

This year, markets will be listening closely to Bernanke’s words for any hint at a stimulus from the United States government. The New York Times reported that speeches from the Fed are made to “cause minimal market excitement – either good or bad” and previous announcements by the Fed suggest little change in policy.

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Recession fear at US economy data

18 August 2011 Last updated at 18:47 GMT Continue reading the main story New data on the US economy, including a huge drop in a regional manufacturing survey, has heightened market fears of a new recession.

The closely-watched guide to manufacturing activity in the mid-Atlantic states slumped to its lowest level since March 2009.

Meanwhile, sales in the heavily depressed US housing market fell unexpectedly, despite mortgage rates hitting their lowest level in 50 years.

Unemployment claims also rose sharply.

The number of people claiming unemployment benefit ticked up by 9,000 last week, to a seasonally adjusted 408,000, according to the Department of Labor.

The Federal Reserve Bank of Philadelphia's manufacturing activity index provided the biggest scare.

It slumped to -30.7 points in August from +8.2 points in July. Any figure below zero indicates a contraction in the regional manufacturing sector.

It is now at its lowest level since March 2009, and Grant Lewis, head of economic research at Daiwa Capital Markets in London, said the Philadelphia index was now "at levels that point towards recession territory".

The Philadelphia index is the first of the US regional manufacturing surveys to be released and is seen as a leading indicator of the economy.

Meanwhile, the US housing market continued to disappoint.

Sales of existing homes in the US during July fell 3.5% from a month earlier, according to the National Association of Realtors.

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[The market sell-off will] revive fears that the down elevator for shares may not end its descent for some time yet.”

End Quote Robert Peston Business editor, BBC News The stock of unsold houses rose to the equivalent of 9.4 months worth of supply, which analysts say is likely to put further downward pressure on house prices.

There was some good news for the housing market, with average interest rates on 30-year mortgages falling to a record low of 4.15% over the past week, according to the US government home loans agency Freddie Mac.

Nonetheless, the string of bad economic data contributed to a slump in global stock markets on Wednesday.

Mr Lewis of Daiwa added that markets were now looking to Federal Reserve chairman Ben Bernanke's speech next week at the US central bank's annual meeting in Jackson Hole, Wyoming, for signs of the bank agreeing to additional quantitative easing (QE).

Under QE, central banks pump new money into the financial system to try to boost the economy.

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