Economy

European Services, Manufacturing Shrink at the Fastest Pace for 10 Years Europe's manufacturing and service industries contracted in November at the fastest pace in at least a decade, putting pressure on the European Central Bank to step up the pace of interest rate cuts.

German Government's Net Debt to Grow Next year as Crisis Stretches Budget German Chancellor Angela Merkel's government will expand its net borrowing requirement next year as it stretches the budget to pay for programs to stabilize the economy.

Singapore Lowers 2008 Growth Forecast; Says Economy May Contract Next Year Singapore lowered its growth forecast for a fourth time this year and said the economy may contract in 2009, prompting policy makers to implement more measures to avoid a prolonged slowdown.

French Consumer Spending Declines as Slumping Economy Boosts Joblessness French consumer spending on manufactured goods slipped the most in four months in October as companies in the euro region's second-biggest economy cut jobs to weather the global economic slowdown and credit crunch.

Bank of Japan Keeps Rate at 0.3%, Considers Adding Funds to Banking System The Bank of Japan held its benchmark interest rate at 0.3 percent and said it will consider pumping more money into the financial system to prop up an economy that fell into a recession last quarter.

U.K. Home Repossessions Rise 12% as Economy Contracts, Unemployment Climbs U.K. home repossessions by mortgage lenders rose 12 percent in the third quarter as higher unemployment and the shrinking economy left more Britons unable to pay their debts.

Euro May Gain 16% Against Dollar as China Spurs Oil Rebound, Barclays Says The euro may strengthen 16 percent against the dollar in the next 12 months as Chinese demand drives up prices for oil, reducing the U.S. currency's attractiveness, Barclays Capital said.

Government Bonds May Extend Rally as Recession Intensifies, Goldman Says Global bonds may extend their rally as economic growth slows and central banks cut interest rates and pump funds into the financial system, Goldman Sachs & Co. said.

Greece Budget Revises Deficit, Growth Forecasts on Global Economic Crisis Greece raised its forecast for its budget deficit for this year and 2009 closer to the European Union ceiling as continued global financial turmoil leads to slower economic expansion.

French Consumer Spending Declines 0.4% in October: Table of the Day Following is a summary of the October consumer spending report from the French Statistics Office in Paris:

Fed Watch

Bernanke May Find Deflation `Back on the Table' as Threat to U.S. Economy Five years after Federal Reserve Chairman Ben S. Bernanke helped stamp out the risk of deflation, the threat is returning as the financial crisis and a worsening economic slump pull inflation lower.

Fed May Lean Toward Boosting Liquidity Rather Than Rate Cuts, Bullard Says The Federal Reserve has limited room to cut its target interest rate and may shift the focus of monetary policy more to increasing liquidity, said James Bullard, president of the Federal Reserve Bank of St. Louis.

Fed Reserve Purchases of Commercial Paper Rise; Borrowing by Banks Falls The Federal Reserve expanded commercial paper purchases from U.S. corporations, increasing holdings by $13.5 billion, or 5.2 percent, while cash borrowing by banks and Wall Street bond dealers declined.

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