A look at economic developments around the globe

AP News
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Posted: Jul 07, 2011 2:40 PM
A look at economic developments around the globe

A look at economic developments and activity in major stock markets around the world Thursday:

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LONDON _ The European Central Bank raised its key interest rate and hinted at more to come, the latest sign that it will not be derailed by the debt crisis in its mission to fight inflation.

The quarter-point hike, to 1.5 percent, was the second this year and widely expected by markets despite a global slowdown and the debt crisis, which almost caused Greece to default this month.

The bank also agreed to extend emergency liquidity to Portuguese banks, as it has done with Greece and Ireland, even though one of the major ratings agencies downgraded the country's bonds to junk status.

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LONDON _ Stronger than expected U.S. jobs figures pushed European stocks higher and helped investors brush off interest rate increases in China and Europe.

The hope in the markets is that the recent soft patch in the U.S. economic dataflow may have come to an end, providing the global economy with further impetus.

Germany's DAX closed up 0.5 percent, the CAC-40 in France rose 0.5 percent and the FTSE 100 of leading British shares was up 0.9 percent.

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TOKYO _ Earlier in Asia, stocks were mixed. Japan's Nikkei 225 dropped 0.1 percent, China's Shanghai Composite Index lost 0.6 percent, Hong Kong's Hang Seng index closed marginally up while South Korea's Kospi was 0.4 percent higher.

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MADRID _ Spain had to pay sharply higher interest rates in two bond auctions, reflecting renewed market tension over the country's ability to handle its debt.

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BERLIN _ Eurogroup chief Jean-Claude Juncker called for "more responsible behavior" from rating agencies in the wake of a much-criticized downgrade for Portugal.

European officials have been scathing about the downgrade by Moody's this week, just as a newly elected Portuguese government pushes through austerity plans.

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ROME _ Rising sugar prices pushed up global food prices once again in June after a brief lull. The U.N.'s Food and Agriculture Organization said its food price index rose 1 percent. Food prices are 4 percent below the all-time high recorded in February.

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WASHINGTON _ House and Senate trade leaders said they were looking at a compromise solution to extend a worker assistance program that has become the primary obstacle to congressional approval of free trade agreements with South Korea, Colombia and Panama.

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NEW DELHI _ Boeing forecast a $150 billion market for passenger airplanes in India over the next 20 years driven by a booming economy.

Indian airlines will need to buy around 1,320 new airplanes to meet the demand of an expanding aviation sector, Boeing India President Dinesh Keskar said.

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LONDON _ The Bank of England kept its key interest rate at an all-time low of 0.5 percent as the tepid economic recovery in Britain continues to outweigh concerns over inflation.

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SINGAPORE _ Singapore's state investment company Temasek said its investments hit a record high as Asian companies reaped solid profits.

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LONDON _ British manufacturing production rose by 1.8 percent in May, reversing a drop a month earlier.

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NEW DELHI _ An Indian government minister offered to resign after investigators said they were probing his alleged involvement in a telecommunications scandal, media reports said.

The allegations against Dayanidhi Maran further tarnished the government of Prime Minister Manmohan Singh, which has been battered by a second telecoms scandal and other high-profile corruption cases.

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TALLINN, Estonia _ Consumer prices in June were 4.9 percent higher than a year ago. It's the highest rate in the 17-member eurozone.

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COPENHAGEN _ Denmark's central bank raised its key lending rate by a quarter of a percentage point to 1.55 percent to follow a similar move by the European Central Bank.

Denmark is a member of the European Union but is not one of the 17 countries that use the euro.