By Anne D. Picker, International Economist, Econoday
Monday, July 28, 2003

Last Week's Highlights
Economic data were sparse most of last week, putting earnings front and center. Mid-summer is high vacation season and investor ranks were thin - and thin volume led to gyrations. Four of the 13 indexes tracked here were down on the week - two in Asia and two in Europe.

Back on July 10, the Bank of England's Monetary Policy Committee voted 8 to 1 for a 25 basis point cut in official interest rates to 3.5 percent. The cut had been a surprise to the markets. There were a variety of reasons for the cut. Minutes from the meeting said recent global economic data had disappointed despite the vast monetary and fiscal stimulus provided by the U.S. They said adverse shocks and investment overhang from the 1990s still remained and inhibited recovery. In Britain, higher public spending has been largely offset by slower consumer demand and subdued private investment. These factors, plus a rising sterling, offset an inflation rate above the 2.5 percent Bank target.

France, passing a pension reform bill, took an historic step towards overhauling the costly privileges of its public sector employees. The pension reform bill passed despite filibustering by leftwing opposition and crippling public sector strikes in May and early June. The bill seeks to address mounting future liabilities in the state controlled pay-as-you-go pensions system and follows Germany's recent plans for overhauling pensions and public health services. Europe's two biggest economies are beginning to address some of their fundamental structural problems at last.

Last Week's Highlights   •   Global Stock Market Indexes   •   Recap of Global Markets   •   Currencies   •  Indicator Scoreboard

The Bottom Line   •   Looking Ahead