VAT 'to be cut in rescue package'

Gordon Brown has refused to comment on reports the government will cut VAT by 2.5% as part of an emergency package aimed at kick-starting the economy.

But the PM said "substantial" measures would be in the pre-Budget report on Monday to pump money into the economy.

And he denied increasing borrowing to fund tax cuts was a "gamble", saying it was "responsible and necessary".

Tory leader David Cameron has warned the government's plans will lead to a future "tax bombshell".

Mr Brown refused to speculate on the contents of Chancellor Alistair Darling's statement on Monday, but he said there was a consensus around the world that any "fiscal stimulus" had to be "substantial to have an impact".

Experts say the government will have to increase borrowing to record levels of £100bn or more, which the country will have to pay back later in higher taxes - and there is no guarantee tax cuts will get consumers spending again.

APEC leaders vow to unlock WTO trade talks next month

In a strong political message to revive the Doha Round of trade talks, 21 Asia-Pacific leaders pledged that they were "committed" to make a breakthrough next month in the long-running free trade talks under the WTO to counter the impact of the deepening global economic crisis.

"We are committed to reach agreement on modalities next month on the basis of progress made to date" on the stalled WTO negotiations, the leaders said in a special statement, released after the first-day session of the Asia-Pacific Economic Cooperation (APEC) forum summit in Lima in the Peruvian capital.

"We and our ministers are intensifying our engagement with World Trade Organisation counterparts to create the convergence necessary to achieve this outcome," it said.

In a rare move, Peru, the chair of the summit, revised the statement to further strengthen the message on the WTO negotiations, which was made available about 12 hours after the initial release, a news agency reported.

The revised statement added a phrase saying that the leaders "direct our ministers to meet in Geneva in December" to achieve the target.

The revised version also said, "We are convinced that we can overcome this crisis in a period of 18 months," referring to the deepening global financial crisis.

It did not give a reason as to why they are convinced. A Japanese senior official said he has not been told why the period 18 months is specified.

The APEC leaders decided to use the word "commit" to signal their full determination to strike an outline deal by the year's end on key trade terms for a successful conclusion of the Doha Round of trade talks, senior officials said.

ArcelorMittal warns of layoffs at US plant

ArcelorMittal, the world's largest steelmaker, has warned that as many as 2,444 employees at a steel plant in northwestern Indiana could be laid off indefinitely in January.

The company announced that it had notified the United Steelworkers labour union and other interested parties about the possibility of an "indefinite layoff" at its Burns Harbor plant in the second half of January.



The recent drop-off in global steel production and the company's previously announced plan to reduce production in North American by 40 per cent factored into the decision, the company said.



"Potential work force reductions are a direct result of the extraordinary economic environment we are facing, and the company hopes to return workers to their jobs as market conditions warrant," ArcelorMittal said in a statement on Friday.



Jim Robinson, director of United Steelworkers District 7, said the union is negotiating with ArcelorMittal to minimise the number of layoffs.



Union leaders at the international level "certainly knew what was going on," Robinson said. "They see the fact there aren't any orders. We're not making a lot of steel."



Robinson said the global economic crisis that has resulted in the cut in steel production calls for action by elected officials.



"They need to step up to the plate and quit worrying about investment bankers and CEOs and start acting on behalf of average, middle-class American workers," Robinson said.


Luxembourg-based ArcelorMittal SA, which operates 21 plants in the United States, employs more than 320,000 people in over 60 countries

Cobra Beer mulls sale or alliance

Cobra Beer, a "less gassy" brand of lager aimed at Indian restaurants, has been put up for sale by its founder, Lord Bilimoria.

It has appointed Rothschild to assist with either a sale or a "strategic partnership", the company's spokesman has said.

Cobra is sold in 6,000 restaurants in the UK and wants to expand in India.

In September the firm raised £15m ($22m) from its investors after failing to sell a stake to drinks giant Diageo.

Cobra Beer hopes a sale or partnership would help achieve its goal of taking 10% of the Indian market by 2012.

It is thought that any sale would value the company at around £200m.

Lord Bilimoria set up the company in 1989, after graduating from Cambridge.

Cobra Beer has been brewed in the UK since 1997.

It was produced initially in Bangalore, India, and imported to the United Kingdom.

The company reported 37% volume growth and retail sales of £178m in October, in line with expectations, despite what it called a "tough economic environment".

Oil prices rise above USD 50 on Obama economy team

Oil prices rose above USD 50 a barrel on Monday in Asia as investors gained some confidence from reports that US President-elect Barack Obama has chosen an economic team to tackle what could be the worst slowdown in decades.

Light, sweet crude for January delivery was up 37 cents to USD 50.30 a barrel in electronic trading on the New York Mercantile Exchange by midday in Singapore.

The January contract Friday rose 51 cents to settle at USD 49.93.

News that Obama plans to name New York Federal Reserve Bank President Timothy Geithner as treasury secretary, Lawrence Summers as director of the National Economic Council and New Mexico Governor Bill Richardson as commerce secretary helped boost US stocks.

The Dow Jones industrial average rose 6.5 percent Friday but Asian markets on on Monday were mostly lower with Hong Kong's Hang Seng index down 1.5 per cent and South Korea's Kospi down 2.4 per cent.

Oil futures have followed stock markets recently, using equities as a proxy for economic outlook and investor sentiment.

"The lack of clarity as to who exactly is in charge of steering the US economy is really hurting the equity markets," said Victor Shum, an energy analyst with Purvin & Gertz in Singapore

US rescues ailing Citigroup bank

The US government has announced a rescue plan for troubled banking giant Citigroup after its shares plunged by more than 60% last week.

The US Treasury is set to invest $20bn (£13.4bn) in return for preferred shares in Citigroup.

The Treasury and the Federal Deposit Insurance Corp will also guarantee up to $306bn (£205bn) of risky loans and securities on Citigroup's books.

The plan follows a $25bn injection of public funds in the bank last month.

Citigroup's market value fell to $20.5bn on Friday, compared with $270bn in 2006.

Last week the company announced 52,000 job losses worldwide, on top of 23,000 job cuts previously announced. It employs around 12,000 people in the UK.

Citigroup has lost more than $20bn in the past year because of the global financial crisis, suffering four straight quarterly losses.

Citibank UK deposit holders are covered by the Financial Services Authority. The Financial Services Compensation Scheme guarantees up to £50,000 per Citibank account holder, should the bank go bust.

'Protecting taxpayers'

The action plan was announced after emergency talks over the weekend between the bank and the treasury department, the Federal Reserve and the Federal Deposit Insurance Corp.

Citigroup is one of the leading US banks and has operations in more than 100 countries.

Many analysts had calculated that the huge financial institution was too big to allow to fail.

"With these transactions, the US government is taking the actions necessary to strengthen the financial system and protect US taxpayers and the US economy," the three agencies said in a statement.

"We will continue to use all of our resources to preserve the strength of our banking institutions, and promote the process of repair and recovery and to manage risks," they added.

The cash injection will come from the $700bn financial bail-out fund created last month.

Saudi Arabia cuts interest rate

Saudi Arabia has cut a key interest rate and taken steps to encourage lending as it faces the slowdown.

The central bank reduced the repo interest rate from 4% to 3%, in an attempt to boost liquidity.

It also reduced the cash reserve requirements for banks, seen as a way to improve the availability of credit.

The move came a day after the benchmark Tadawul All Share Index fell to its lowest level in five years, hit by the global slowdown and falling oil prices.

The index shed 9.2% on Saturday, the start of its trading week. Since the start of the year the index is down more than 60%.

The Gulf region has been hard hit by a huge fall in oil prices, a key export.

Oil prices are around two thirds lower than they were in July when they hit a record above $147 a barrel.