Wednesday, October 5, 2011

Morning Brief: Austerity measures lead to slower growth in U.K.; Claims of 'industrial scale' phone hacking by British papers ; Adobe releases updated versions of Flash, Air

Despite reporting growth rates far below original estimates, the Tory led government reiterated its plans to continue budget cuts. The Office for National Statistics (ONS) said today that the economy in the U.K. grew only 0.1% in the second quarter of this year, below even the modest projections of the government.

The government will stick to the deficit reduction plan which has won the UK credibility and stability," a Treasury spokesman was quoted as stating by the BBC, "but the most important thing for the economy now is restoring confidence, which will depend on the eurozone decisively dealing with its problems."

Yesterday Moody's, one of the three big credit rating services, lowered the rating on Italy's bonds by three steps, to A2 from Aa2. "The negative outlook reflects ongoing economic and financial risks in Italy and in the euro area," Moody's said in its announcement.

Showing its perverse side, the news actually spurred stocks to recover late in trading, as the Dow, which had been trading down all day, ended up in positive territory. The reason traders gave for the late day rally was that all the bad news would eventually lead to more action from European finance ministers, though what evidence they would have for this appears elusive.

Actor Hugh Grant yesterday said that he believed that a half a dozen U.K. newspapers were involved in phone hacking. “I know for a fact they have. This will all come out very soon, and not on a minor scale, on a huge industrial scale, through the police inquiry or the Leveson inquiry," Grant told The Telegraph.

Grant continued that he was worried that the Tories would use the scandal as an excuse to widen investigation as a way of attacking the BBC, which conservatives see as being biased.

Lost in all the Apple news yesterday, Adobe released new versions of both Flash and Air, its cross-platform development platform. Flash Player 11 is said to have improved graphics acceleration.