20100923 1445 Local & Global Economic News.

Malaysia: Inflation accelerates to fastest pace in 15 months
Malaysia’s inflation rate climbed in August to the highest level in 15 months, a gain that may put pressure on the central bank to consider resuming interest-rate increases after pausing this month. Consumer prices rose 2.1% from a year earlier after gaining 1.9% in July, the Putrajaya, Malaysia-based statistics department said. (Bloomberg)

Thai: Exporters seek more measures to curb baht’s gain
Thailand’s plan to ease restrictions on fund outflows may not be enough to stem an appreciation in the baht that threatens to slow growth in overseas shipments, exporters and trade groups said. The central bank will allow companies to invest and lend more abroad and give them more flexibility when repatriating overseas earnings, moves aimed at alleviating pressure for the baht to appreciate from its strongest level in 13 years. (Bloomberg)

Japan: BOJ flags ‘downside’ risks for economy as yen rises
Top Bank of Japan officials flagged rising risks to the nation’s growth as the yen climbed in the aftermath of the US Federal Reserve signaling willingness to consider more monetary stimulus. “We’re entering a situation where we need to pay more attention to downside risks,” board member Ryuzo Miyao said. Governor Masaaki Shirakawa said that the central bank needs to monitor risks to Japan’s economy, exports, and corporate profitability. (Bloomberg)

China: Structure, not yuan, causes trade surplus, Wen says
Chinese Premier Wen Jiabao said the yuan’s value isn’t causing the US trade deficit with his country, rejecting President Barack Obama’s assessment that China is keeping the currency cheap to aid exports. “The main cause of the US trade deficit is not the exchange rate of the Chinese currency, but the structure of investment and savings,” he said. (Bloomberg)

UK: 2011 GDP growth forecast cut as budget squeeze looms
The UK economy will grow slower than previously forecast next year as the biggest public spending squeeze since World War II takes hold, the Confederation of British Industry said. GDP will rise 2% next year, down from a forecast in June of 2.5%, and the Bank of England won’t raise interest rates until the second quarter, the UK’s biggest business lobby said. (Bloomberg)

UK: BOE must raise interest rate slowly, Sentance says
Bank of England policy maker Andrew Sentance reiterated that the central bank should raise its benchmark interest rate “slowly” to combat inflation as the British and world economies avoid a double-dip recession. “The bank needs to gradually move interest rates up in a slow way which will not destabilize business confidence,” he said. (Bloomberg)

EU: Europe consumer confidence rises less than forecast
European consumer confidence improved less than economists forecast in September, adding to signs the region’s recovery is losing momentum. An index of consumer sentiment in the 16-nation euro region rose to minus 11.2 from a revised minus 11.4 in August, the Brussels-based European Commission said. (Bloomberg)

US: Fed’s inflation concern broadens easing rationale
The Federal Reserve moved closer to a second wave of unconventional monetary easing and said for the first time that too-low inflation, in addition to sluggish growth, would warrant taking action. The Federal Open Market Committee’s statement that inflation is “somewhat below” levels consistent with its congressional mandate for stable prices pushed yields on two-year Treasuries to a record low. (Bloomberg)