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Bank of England cuts rates after slowest annual growth in 12 years
London: After two years the Bank of England made its first interest rate cut in order to kick-start a slowing economy, which grew at the slowest annual rate for 12 years in the second quarter. The bank dampened hopes for further swift reductions, however.

In its 100th interest rate decision, the bank's monetary policy committee lowered its base rate by 25 basis points to 4.5 per cent.
The move had been widely expected in the city after a sharp slowdown in the economy, and with four of the committee's nine members already voting for a rate reduction in July.

The statement accompanying the decision highlighted "subdued" output growth in the first half of the year and a slowdown in household spending and business investment.

While downside risks to economic growth remained, the Bank also noted "some signs of a pick-up in consumer spending" and a potential boost to activity from rising equity prices and the recent fall in sterling.

Short-sterling interest-rate futures rose modestly after the decision as traders bet rates could be cut again, though probably not until late this year.

The rate cut marked the first change in the cost of borrowing since August last year when the Bank completed a series of rate rises aimed at cooling the then soaring housing market and runaway consumer boom.

It was the first reduction in rates since July 2003.

Business organisations had long been clamouring for a rate reduction and welcomed yesterday's move.
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HSBC adds strength to US operations with Metris buy
New York: HSBC has added further to its strength in the USA after agreeing to buy rival US credit card company Metris for US$1.59bn.

HSBC is already the sixth largest issuer of Visa and Mastercards in the US and buying Minnesota-based Metris, with its $5.9billion of credit card loans, takes it closer to the country's number five player Capital One.

The deal gives HSBC more customers in the Midwest to add to its strength on the east and west coasts, and gives the bank a portfolio of borrowers with a mid-ranking credit rating.

The deal is the third purchase of a US credit card provider in the past two months, after Bank of America's $35billion purchase of MBNA, and Washington Mutual's takeover of Providian Financial for $6.45billion.
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Nokia chief Ollila to take charge at Royal Dutch Shell
London: Outgoing Nokia chief executive, Jorma Ollila, will assume responsibilities as non-executive chairman at Royal Dutch Shell, replacing Aad Jacobs.

Ollila will be based in the Hague and will take up his new role in June next year.

His appointment, which will run for an initial period of three years, marks a further step in the restructuring at Royal Dutch Shell in the wake of the reserves over-booking scandal last year.

Ollila, under whose stewardship Nokia was transformed into the world's leading mobile phone maker, was selected after a process, which included executives from the US, Britain, the Netherlands and elsewhere in continental Europe.

Analysts say that though the 54-year-old Finn does not have oil industry experience, but it will not act as a drawback. Ollila's international experience in the global environment will enable him to supervise the company as a whole.

Ollila was instrumental in taking the 140-year-old Nokia from a sprawling conglomerate, which spanned a host of businesses from the production of paper pulp to rubber gloves, into its position in the mobile phone market.

When he moved from heading up the company's fledgling mobile phone business to the chief executive's post in 1992 Ollila set about selling off the company's non-core assets, including businesses that made tyres, televisions and loudspeakers.

Instead, the company invested heavily in the growing market for handsets, outpacing its fellow Scandinavian firm Ericsson in the process and finally beating the market leader Motorola into second place in 1998 as the sector exploded with the advent of pre-pay packages in many markets.

At the company's height, Nokia controlled 40% of the entire worldwide mobile phone market. In recent years, however, Nokia has seen its dominance of the market challenged by Asian manufacturers such as Samsung and LG.

Ollila will become the non-executive chairman of Nokia when he steps down as chief executive.
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Wal-Mart's Turner takes over as operating chief at Microsoft
Redmond, USA: Microsoft Corp. has named Wal-Mart Stores Inc.'s Kevin Turner as its chief operating officer.

Turner, who oversaw more than $37 billion in sales as head of Sam's Club, will run sales, marketing and service as well as the company's fulfillment and technology operations, Microsoft said through a statement.

Microsoft hasn't had an operating chief since Rick Belluzzo stepped down in 2002, leaving Ballmer to oversee seven business units and all operational divisions. As an outsider, Turner also has to learn to work with Ballmer and chairman Bill Gates, a task others found to be a challenge. Senior executives Belluzzo, Maggie Wilderotter and Richard Emerson each left in three years or less.

Turner, 40, becomes the second outsider Ballmer hired to a top executive post in the past five months. He named International Paper Co.'s Christopher Liddell as finance chief in April.

Before serving as chief executive of Sam's Club, Wal- Mart's warehouse store unit, Turner helped make technology-buying decisions as chief information officer for Wal-Mart. Turner, who graduated from East Central University in Ada, became the company's youngest-ever executive when he was named vice president of application development at age 29 in 1995.

Turner will receive an annual salary of $570,000 and 320,000 shares. He may get a bonus of as much as 100 percent of his salary and a stock award of 624,000 based on performance goals.
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Lee Raymond, chairman of Exxon Mobil to retire at year's end
New York: Exxon Mobil, the world's largest oil company, announced today that Lee R. Raymond, its chairman and chief executive, would retire at the end of the year, after 12 years at the helm. Raymond, 66, has spent the past 42 years at Exxon.

He will be replaced by Rex W. Tillerson, 53, Exxon Mobil's president.

Exxon Mobil was born in 1999 with the $82 billion merger of Exxon, the former Standard Oil Company of New Jersey, and Mobil Oil, once the Standard Oil Company of New York, or Socony. Each day, it pumps 2.5 million barrels of oil, more than an OPEC producer such as Kuwait, and 10 billion cubic feet of natural gas.

Exxon is also the world's top refiner and controls reserves of 22 billion barrels of oil, the most among its publicly traded peers.

But to his critics, Raymond is one of the last hardliners on global climate change. He remains skeptical that human activity is responsible for the current warming trends, saying that the science is not conclusive.

Raymond is an old-fashioned oilman, known for his direct, sometimes abrasive, style and his limited tolerance for analysts, investors or journalists.

But the company's shareholders have had little to complain about given the company's staggering profits, record dividends and stock performance. Last year, Exxon Mobil posted profits of $25 billion on sales of $291 billion, which is larger than the gross domestic product of countries like Austria or Saudi Arabia. This year, the company is on track for an even better performance.

Since the 1999 merger, Exxon Mobil has paid $33 billion in dividends to its shareholders and spent $24 billion buying back 8 percent of its shares.

Raymond, who was born in Watertown, S.D., joined Exxon in 1960 with a degree in chemical engineering from the University of Minnesota. He spent most of the early years of his career at Exxon in refining and marketing. He became president in 1987 and chief executive and chairman in 1993.

At the board's request, he deferred his departure past 2003, the year he reached the company's mandatory retirement age of 65, and agreed to stay on to oversee the merged operations and pick a successor.

His successor, Tillerson, was born in Wichita Falls, Tex. He joined Exxon in 1975 as a production engineer after graduating from the University of Texas at Austin with a degree in civil engineering. He rose through the company's ranks in the United States, Yemen and Russia, spending his entire career at Exxon's production units. He was named president in March 2004, an obvious stepping-stone to replace Raymond.
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