Finance Blog number 1

Robert M. Mills has been named the new president and chief operating officer of University Housing Services Inc. in St. Petersburg, succeeding UHS founder William H. Mills Jr., who will remain as chairman and chief executive officer.

Robert Mills, who joined his father’s firm in 2002, was the executive vice president of the campus housing development company, responsible for the operational efficiency of the development process and directly involved in more than $300 million of on-campus development projects in the last eight years.

The leadership shift comes when the student housing industry has been faced with the ongoing challenge of finding viable ways to implement increasing demands for student housing with shrinking college budgets and financial options, UHS said in a release. Robert Mills is expected to focus on growing the company’s core student housing business by expanding both the company’s service offerings and geographic reach.

UHS has worked on more than 16 campus housing projects throughout the Southeast, according to the company’s Web site, including Florida Gulf Coast University, the Florida Institute of Technology and the University of North Alabama among others payday loans. UHS maintains a southeast regional office in Atlanta.

Robert Mills, who received a bachelor’s degree in building construction in 1987 from the University of Florida, previously worked for Beers Construction Co., rising to group vice president where he was responsible for meeting all the construction needs of both public and private higher-education institutional clients.

Before starting UHS, William Mills was owner, chairman and president of Federal Construction Co. fro 1982 to 1991, which would become one of the largest construction management firms in the Southeast before being sold to Trafalgar House.

Federal Construction was originally known as Mills & Jones Construction Co., founded by William Mills Sr. in 1946. That builder was responsible for buildings such as the Maas Brothers Department Store in St. Petersburg, the Florida Power Corp. headquarters in St. Petersburg and the original Busch Gardens outside of Temple Terrace.

William Mills Sr., who helped found UHS following the Federal Construction sale, died last June. He was 98.

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A five-foot robot sits in Jon Wheatley’s chair during most U.S. investor presentations, listening, speaking, and watching the meeting as Wheatley maneuvers it from a laptop in London. The shtick draws attention to Wheatley and his company, social media Web site DailyBooth.com, but the robot (provided by one of his investors) serves a purpose: Wheatley cannot set foot in the United States.

The 22-year-old Brit’s deportation came from an innocent mistake. When immigration officials pulled him aside during a three-month trip to Silicon Valley last summer, he mentioned he might talk to an attorney about trying to get a visa to stay and build his company there.

Officials deported him, quashing his immigration plans. Wheatley now works nights to match U.S. business hours while his American cofounder, Ryan Amos, runs the Mountain View, Calif., company. "I’m completely bummed out about it," says Wheatley. "It’s something we really shouldn’t have to be dealing with."

Stories abound of smart, motivated foreigners eager to live here, start a business and create jobs amid the nation’s worst economic recession in decades. But no visa exists specifically for entrepreneurs.

Their contributions could be huge: a quarter of American tech companies — including Google (GOOG, Fortune 500), Yahoo (YHOO, Fortune 500) and Intel (INTL) — have foreign-born founders. In Silicon Valley, half of all tech company founders hail from outside America, according to a study by Vivek Wadhwa, a Harvard researcher and Duke engineering professor. These entrepreneurs typically either came here as children or waited years to get their green cards, Wadhwa says. Today, that backlogged process may take decades. It’s a massive reverse brain drain, as skilled foreigners go elsewhere.

"Let these people in and you would way more than double the number of successful startups in the United States," says Paul Graham, whose venture capital firm, YCombinator, provided seed financing to Wheatley’s business.

Graham wrote a blog post proposing that the U.S. issue 10,000 visas each year earmarked specifically for entrepreneurs. The suggestion unleashed a grassroots groundswell and a lobbying Web site, StartupVisa.com. One lawmaker has taken up the cause: U.S. Rep. Jared Polis, D-Colo., introduced a legislative measure last week that would include entrepreneurs in the EB-5 visa class, which is now reserved for foreign investors in U.S. businesses.

The measure is already drawing criticism. "We don’t want this to be another backdoor immigration policy where people just buy their way in," says Rick Oltman, national media director of Californians for Population Stabilization, which wants to eliminate illegal immigration and reduce legal immigration. "We would be skeptical of the government’s ability to monitor this stuff, because of they have not done a good a job of it in the past instant payday loans."

Few would claim that inviting educated people to create jobs and wealth is bad for the economy. Chile has thrown its doors wide open, not only offering permanent visas to entrepreneurs but paying them up to $30,000 to visit the country and another $30,000 to start a business. The government will even pick up the office rent for the first five years.

But laying out the welcome mat in the United States is tricky. Paperwork and bureaucracy mire existing visa rules, and immigration officials are far from hospitable. Audits and investigations are common at companies that hire foreign nationals.

"I have never seen this kind of crackdown on businesses," says Sheela Murthy, an immigration lawyer in Owings Mills, Md. The paperwork required to bring on foreign workers is extremely complicated, and any mistake can result in fines totaling thousands of dollars per violation, she says. "If you don’t dot all your i’s and cross all your t’s, you could be shut down."

A new visa class would mean sorting out a myriad of details, like how the government determines who qualifies as a legitimate entrepreneur. One idea: A board of venture capitalists, entrepreneurs and lawyers could screen those visa applications. The government could set benchmarks, requiring, for example, that a founder own at least 10% of a company that has raised $250,000 within the past year.

Another idea: Create a "gold card" class of investors, whom the government has vetted and trusts. Any investment their firm makes in a foreign national’s business means an automatic green card for that company’s founder.

Of course, there’s a clear pitfall to tying immigration status to business success: Startups fail. What happens to the visa then? Boulder venture capitalist Brad Feld proposes requiring the entrepreneur to start another company within a year or the visa expires.

Despite pressure to do something — anything — to improve the job market, Congress isn’t likely to move any time soon on the startup visa proposal. Lawmakers are tied up slugging it out over health care reform and aren’t likely to take a serious look at immigration reform for at least another year. Even then, controversy over illegal immigration could overshadow or kill the measure.

In the meantime, Wheatley is doing what he can to build his business in the United States — even sending his robot to business mixers. "It’s a little weird sometimes, but we have to make the most of the situation," he says. 

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The European Ombudsman rebuked European Union regulators on Wednesday for procedural errors in their antitrust probe of Intel but the censure will not affect a 1.06 billion euro ($1.58 billion) fine against the U.S. chipmaker.

The European Commission levied the record fine in May for illegally shutting out rival AMD. The ombudsman’s decision is non-binding but it could help the world’s No. 1 chipmaker in its appeal against the ruling to Europe’s second-highest court.

While the European Ombudsman can only make recommendations, he is one of the few independent checks on the Commission’s antitrust agency, which critics say acts as judge, jury and prosecutor against companies. In his report, Ombudsman P. Nikiforos Diamandouros said he “found maladministration on the grounds that the Commission failed to make a proper note of a meeting with computer manufacturer Dell relating to the Intel investigation.”

He did not make any finding as to whether the EU executive had infringed Intel’s rights of defense.

The ombudsman also did not make a finding of maladministration over Intel’s second allegation that the Commission had encouraged Dell to enter into an information exchange agreement with AMD.

The Commission said it did not agree with the ombudsman’s finding that it should have prepared a formal note on the meeting and said it had given Intel the chance to comment on the non-confidential version of the internal note cash till payday.

“Such internal notes are normally not accessible since they also reflect the Commission’s investigative strategy which parties do not have a right to access,” the EU executive said in a statement.

“Intel’s rights of defense were fully respected throughout the procedure.”

Intel said the ombudsman’s decision validated its charges.

“Intel has consistently said that DG Comp ignored evidence that was potentially exculpatory for Intel and that it was selective in its use of other evidence,” the company said in a statement, referring to the Commission’s Directorate-General for Competition.

The ombudsman’s confidential decision was sent to the Commission and Intel in July this year, before Wednesday’s non-confidential decision was released following consultation with Intel, Dell and AMD, the ombudsman said.

($1=.6712 Euro)

(Reporting by Foo Yun Chee; editing by David Brunnstrom and David Cowell)

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Bailed-out British lender Lloyds Banking Group is to cut a further 5,000 jobs by the end of 2010 as it continues to overhaul its operations and integrate HBOS.

Lloyds, 43 percent owned by the government, said on Tuesday it would take mitigating actions, including redeploying staff and releasing contractors and temporary employees, to limit the net reduction in permanent jobs to 2,600.

That would take net cuts to permanent jobs at Lloyds to around 9,000 since it acquired HBOS in January. Analysts have estimated that over 30,000 jobs could go as the two banks integrate.

News of further bank sector redundancies came a week after more than 5,400 jobs were cut at part-nationalized rival Royal Bank of Scotland and HSBC.

The Unite union said the cuts were “corporate arrogance.”

“This country’s financial sector should be looking toward the future, rather then continuing to slash jobs without proper consideration of how to re-build the public’s confidence in our tarnished banking sector,” Unite national officer Rob MacGregor said in a statement calling for a suspension of job losses payday advance.

Lloyds said 2,820 roles — the bulk of the total — would be cut in group operations, with contractors and temporary staff helping to keep the net reduction to 1,350.

It will also cut 1,190 jobs in insurance across Britain, and 950 in its mortgage operations where business will be consolidated to a handful of sites.

Lloyds said compulsory redundancies would be a last resort.

(Reporting by Clara Ferreira-Marques; Editing by Dan Lalor)

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U.S. securities regulators are reviewing a proposed roadmap to move U.S. companies to international accounting rules, but are struggling with a lack of public consensus on how to get there, a Securities and Exchange Commission official said on Thursday.

Last November, in one of the Commission’s last major projects under former Chairman Christopher Cox, the SEC staff released a suggestions that would have U.S. companies filing financial results under International Financial Reporting Standards, or IFRS, by 2014, with the option for some companies to adopt the rules earlier.

The adoption of international accounting standards by U.S. companies would move the world toward one set of standards, and might make it simpler for investors to compare companies operating in different regions. Proponents also say this would enable companies to raise capital more easily in whatever markets appeal to them.

When the SEC’s new chairman, Mary Schapiro, took over early this year, she said she would review the proposals, and SEC officials have promised to provide more clarity before 2010.

But at a New York State Society of CPAs conference in New York on Thursday, Julie Erhardt, deputy chief accountant at the SEC, said that while most of the public agrees with the concept of one single set of high-quality accounting standards, regulators have noted there is very little agreement on anything else.

“The comment letters on how to get there were an array, meaning every possible idea you could think of on how to get there, somebody had in a letter — there was no unanimity,” Erhardt said.

The so-called roadmap proposal was originally open for public comment until mid-February, but the SEC extended that period until late April. The agency received about 220 comment letters on the topic, but that is a small number considering the change is likely to affect all of the 10,000-plus U fast payday loan no faxing.S. companies regulated by the SEC.

“In terms of the staff being able to say, ‘Well, here’s a majority view,’ you can’t say that,” Erhardt said of the comment letters which differed on basic concepts such as how many accounting standard setters to have, and whether the United States should permit any companies to make the switch early.

“It creates more of a blank sheet of paper for the staff working with the commissioners,” she said, noting the Commission simply “hasn’t decided yet.”

Among other issues, several companies said they do not believe the SEC has accurately estimated how much a switch to IFRS would cost, and some wonder whether Congress actually supports the proposal, Erhardt said.

Major economies like Japan, Canada, and South Korea are joining Europe and the more than 100 other countries using IFRS, but the United States, which still operates off Generally Accepted Accounting Principles (GAAP), risks remaining the last major holdout.

Some critics say that if the United States embraces IFRS, it could jeopardize more than a century of progress under U.S. accounting rules, and expose companies to more lawsuits because IFRS has largely been designed by less litigious countries and is viewed as more principle-based than rules-based.

“We’re working on what the next steps could and should be, but there isn’t a date certain to announce anything,” Erhardt said.

(Reporting by Emily Chasan, editing by Matthew Lewis)

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Italian business confidence rose in October to the highest in more than a year, a further sign that companies are boosting output as the country emerges from its worst recession since World War II.

The Isae Institute’s manufacturing sentiment index climbed to 77.1 from a revised 74.3 in September, the Rome-based research center said today. The October reading, the highest since September 2008, compared with a median forecast of 75.1 in a Bloomberg News survey of 16 economists.

“The combination of new orders and de-stocking are currently supporting the modest increase in production,” said Annalisa Piazza, an economist at Newedge Group in London. “Italy is on a moderate upward trend and further improvement will come in the near future.”

Industrial production posted a record rise in August as Europe’s fourth-biggest economy benefited from growing exports and government incentives to trade in old cars. As manufacturers stepped up production to rebuild stocks, output will rise this month after falling in September, employers’ association Confindustria said yesterday.

Italy’s economy expanded in the three months through September after five quarters of contraction, the country’s central bank said in its October bulletin. Italy will grow 0.6 percent in 2009 after shrinking 4.7 percent this year, Isae said on Oct. 14. The forecast compares with a projection for 0.8 percent growth by Confindustria.

French Confidence

The optimism of Italian manufacturers mirrored a rise in confidence in France, where an index of sentiment among factory executives climbed to the highest in more than a year, buoyed by demand outside Europe and state support for the car industry. German business confidence climbed to a 13-month high in October, improving the outlook for growth in Europe’s largest economy, Ifo institute said on Oct. 23.

Government incentives in Italy and across Europe have helped auto sales recover from a global decline caused by the recession, benefiting Italy’s biggest manufacturer, Fiat SpA.

On Oct. 21, the Turin-based carmaker that acquired a stake in Chrysler Group LLC unexpectedly reported a third-quarter profit payday advance lenders. Its chief executive officer, Sergio Marchionne, said Fiat will lose 370 million euros ($556 million) in operating profit next year without the incentives.

The Italian government will wait until the release of new auto sales numbers next month before deciding whether to extend the incentives to 2010, Industry Minister Claudio Scajola said in an interview on Oct. 22.

Export Uncertainty

As France and Germany, Italy’s two biggest trading partners, emerged from recession in the second quarter, Italian exports to the European Union returned to growth in July before falling in August. Exports “haven’t shown a clear recovery over the summer,” the Bank of Italy said on Oct. 15.

“The Italian economy is largely dependent on exports,” Piazza said. “The current uncertainties on the global recovery might put a lid on business confidence going forward.”

As job losses mount, there are also risks to consumption in the $2.1 trillion economy. The number of employed Italians fell 1.6 percent in the second quarter, the biggest drop since 1994, while the jobless rate rose to 7.4 percent, the highest since 2005. The rate may exceed 10 percent in 2010 should the recovery remain weak, the Organization for Economic Cooperation and Development said last month.

The Bank of Italy said that unemployment will hold back gains in consumer spending in the coming months. Consumer confidence unexpectedly fell from a seven-year high in October on concern that rising joblessness may hit spending power, Isae said yesterday.

Manufacturers were more optimistic about the job market than consumers, today’s report showed. A sub-index measuring expectations on employment rose to minus 16 in October from minus 19.

Isae conducted its latest survey of 4,000 companies between Oct. 1 and Oct. 20. The research center revised its September reading from an initial 74.

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Treasury Secretary Timothy Geithner said signs of economic recovery are “stronger” and have appeared “sooner” than expected, while reiterating it’s not yet time to roll back stimulus programs.

Financial conditions have improved “dramatically,” particularly in the U.S., where the housing market has stabilized, Geithner said in a statement issued in Istanbul today. Still, jobless rates are “unacceptably high” and the financial system remains damaged. As a result, it’s too soon for governments to withdraw stimulus, Geithner said.

“Planning for an eventual exit is the responsible and necessary thing to do, but we are not yet in the position where it would be prudent to begin to withdraw fiscal and monetary policy support,” Geithner said in remarks released after a meeting of finance ministers and central bankers from the Group of Seven nations.

“Exit will not be like flipping a switch,” he said fast pay day loans. “Instead, as conditions stabilize and growth strengthens, we will unwind the extraordinary policy measures we’ve taken, phasing them out carefully to avoid a damaging cliff.”

G-7 policy makers meet at the end of a week in which officials from France to Canada voiced concern that a sliding dollar is threatening to impede their recoveries from the deepest global recession since World War II. The dollar has dropped 14 percent against a basket of seven currencies since early March.

Geithner didn’t mention currencies in his prepared remarks. In his recent public comments, he has reiterated that the U.S. doesn’t intend for the dollar’s role in the global economy to diminish.

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New Zealand emerged from its worst recession in three decades, unexpectedly expanding for the first time in six quarters on rising consumer spending and exports of logs and dairy products. The nation’s currency surged.

Gross domestic product increased 0.1 percent in the three months to June 30 following a 0.8 percent drop in the first quarter, Statistics New Zealand said in Wellington today. The median estimate in a Bloomberg survey of 12 economists was for a 0.2 percent contraction.

New Zealand’s dollar rose to a 13-month high as traders increased bets that Reserve Bank Governor Alan Bollard may raise interest rates sooner than he indicated earlier this month. Bollard, who expected a second-quarter contraction, said on Sept. 10 the benchmark interest rate needed to stay at a record-low 2.5 percent until late next year.

“We see the scope for growth to add pressure to monetary policy expectations over the second half,” said Bernard Doyle, economist at Goldman Sachs JBWere Ltd. in Auckland. “We continue to believe the first rate hike will come mid-next year, but with a reasonable chance of an earlier move.”

New Zealand’s dollar surged as high as 73.12 U.S. cents from 71.94 cents before the report was released. It bought 72.66 cents at 1:15 p.m. in Wellington.

The currency has gained 2.8 percent in two days after the nation yesterday posted the narrowest current account deficit in more than four years. Fonterra Cooperative Group Ltd., the world’s largest dairy company, also raised its milk price forecast yesterday for the coming year, boosting farm incomes.

Rate Outlook

Traders expect Bollard will raise the official cash rate by 149 basis points over the next year as the economy recovers, according to a Credit Suisse index based on swaps prices. A basis point is 0.01 percentage points.

Bollard may be reluctant to raise the benchmark too soon because that may further stoke the currency and curb exports, which make up 30 percent of the economy. New Zealand’s dollar has gained 27 percent against the U.S. dollar in the past six months, the second best performing major currency after South Africa’s rand.

“The strength of the currency will continue to be a concern and a risk to the forecast recovery,” said Robin Clements, chief New Zealand economist at UBS AG in Christchurch.

The current account deficit narrowed to 5.9 percent of GDP in the year ended June 30, the smallest gap since the year ended Sept. 30, 2004, Statistics New Zealand said yesterday.

Fonterra raised its milk forecast 12 percent, citing increased global demand. Economists estimated that would add at least NZ$700 million ($510 million) to farm incomes.

‘Patchy Recovery’

Bollard this month forecast the economy shrank 0.1 percent in the second quarter and would undergo a “patchy recovery” in the second half of the year. He projected growth of about 0.8 percent a quarter in 2010.

Gross domestic product began contracting early last year after Bollard raised interest rates in 2007 to counter a housing boom and consumer spending that was being fanned by excessive borrowing.

An ensuing collapse in world trade and tight credit conditions stalled business confidence and demand for exports. The New Zealand dollar’s gain also curbed overseas shipments, which make up a third of the economy.

As sales slumped, companies shut plants and fired workers, pushing up the jobless rate to a nine-year high of 6 percent in the three months ended June 30.

Record-low interest rates, government spending and fewer New Zealanders heading overseas for higher-paid jobs has helped revive the housing market and consumer confidence.

House Prices

Second-quarter house prices rose for the first time in six quarters and have continued to gain, according to the government. Consumer confidence rose to an 18 month high in June, according to a Westpac Banking Corp./McDermott Miller Ltd. poll.

Household spending, which makes up 60 percent of the economy, rose 0.4 percent in the second quarter, the first gain in six quarters, today’s report showed.

Sales of food and other so-called non-durable goods gained 0.8 percent and spending on services increased, led by medical and health. Purchases of durable items such as cars, furniture and home appliances declined.

Warehouse Group Ltd., the nation’s largest discount retailer, said on Sept. 11 that sales increased in the three months ended Aug. 2, the first quarterly gain since early 2008.

Exports of goods and services increased 4.7 percent in the second quarter amid higher shipments of dairy products and lumber. Tourist spending in New Zealand declined. Import volumes slumped 3.8 percent.

Business investment increased 1.3 percent as companies spent more on software and on oil gas exploration, the statistics agency said. Plant and machinery investment fell.

Inventories declined by a record amount as demand for exports was met through existing stock rather than production, the agency said.

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U.K. Chancellor of the Exchequer Alistair Darling said he is planning measures to give small companies direct access to capital markets as banks curb lending to boost their balance sheets.

Darling plans to announce steps in his annual Pre-Budget Report, due in the next months. Some of the programs may be running by the start of 2010. The plan will allow institutional investors to raise capital or package loans for small companies.

“In the same way that big companies can access funding directly from capital markets, by issuing bonds or commercial paper, I want to start creating a different financial model in the future, in which small companies get funding from sources other than banks,” Darling writes in the Observer newspaper today. “Our goal is to make finance the servant, not the master, of the real economy.”

The plan marks the latest effort by the government to channel money to companies and households after orchestrating a rescue package for banks last year including Royal Bank of Scotland Group Plc and Lloyds Banking Group Plc worth 1.4 trillion pounds ($2.4 trillion). Small companies complain that, despite the bailout, banks are still holding back loans.

About 92 percent of finance to small and medium-sized companies is provided by Britain’s four biggest banks. Such companies tend to use those banks for all their financial services from accounting to foreign exchange, according to the U.K. Treasury.

Funding Reliance

“If there is one lesson to be learnt from this crisis, it is credit must never be allowed to dry up because of reliance on a small number of banks,” Darling wrote.

The British Bankers’ Association said loans to small companies increased by 23 percent in June compared with the monthly average for the year. The Federation of Small Businesses says this isn’t enough and in August expressed concern that merged banks will have too tight a grip on its members.

The small company lobby group in August also said that small firms are still finding it tough to get loans and overdrafts from banks.

Darling has previously said he plans to make the banking industry more competitive by lowering barriers facing new lenders. The Treasury is considering plans to reduce the two- year period it takes for an institution to be granted a banking license.

Lending Rates

About 52 percent of companies with sales below 1 million pounds paid more than 6 percent above the Bank of England interest rate in March compared with 35 percent in the same month in 2007, the Treasury said in July. Just over a third paid more than 9 percent above the central bank rate in March compared with 2 percent in 2007.

The Treasury took majority stakes in Royal Bank of Scotland and Lloyds in addition to nationalizing Northern Rock Plc and Bradford & Bingley Plc after financial turmoil brought the industry near collapse in 2007 and 2008.

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Australia’s benchmark interest rate at a half-century low of 3 percent is helping drive economic growth amid signs domestic demand is more resilient than expected, the central bank said.

“Members judged the current stance of monetary policy to be consistent with fostering sustainable growth and low inflation,” while still giving the bank scope to cut borrowing costs “at a later stage” if needed, policy makers said in minutes of their July 7 meeting released in Sydney today.

The full impact of Reserve Bank of Australia Governor Glenn Stevens’ decision to slash the overnight cash rate target by a record 4.25 percentage points between September and April will “still be coming through for some time,” the minutes said. Australia’s economy has survived the most dangerous phase of the global recession and will expand faster than the government forecasts, research company Access Economics said today.

“The Reserve Bank seems to be tentatively saying the worst is over,” said Annette Beacher, senior fixed-income strategist at TD Securities Ltd. in Singapore. “I got the impression that if they are going to ease, that would be at a later stage.”

The Australian dollar traded at 81.33 U.S. cents at 2:50 p.m. in Sydney from 81.22 cents before the minutes were released. The two-year government bond yield was unchanged at 4.02 percent.

Rate Unchanged

Policy makers left the benchmark rate unchanged two weeks ago for a third month after a report showed gross domestic product unexpectedly grew 0.4 percent in the three months through March 31 after shrinking 0.6 percent in the fourth quarter. Economists had forecast a 0.2 percent contraction.

“The early and substantial easing of both monetary and fiscal policy had been effective in supporting demand, which, if anything, had been more resilient than expected,” today’s minutes said.

Further signs that the economy isn’t as weak as expected include “surprisingly strong” exports, helped by demand from China, reports that some mining companies and ports are “again operating close to capacity,” rising household spending, car sales and demand for homes, the minutes said.

The number of cars sold in June rose 5.7 percent, the third month of gains, to the highest level since August 2008, a government report showed today.

Global Economy

There are “further signs of stabilization in the world economy,” the central bank said today car insurance quotes. “In Japan, recent data had been more encouraging than they had been for some time.”

The Bank of Japan last week raised its economic assessment for a third month, citing an increase in government spending and rebounds in factory output and exports. The economy has “stopped worsening,” the BOJ said, while adding that the economic outlook is “uncertain.”

China’s economy grew a stronger-than-expected 7.9 percent in the second quarter from a year earlier, a report showed last week. Singapore’s GDP also expanded faster than anticipated.

For Australia, “the outlook remained for a gradual recovery to begin later in the year,” the Reserve Bank said.

While the labor market is likely to remain “soft for some time,” there are signs employers are trying to limit job cuts.

“The current inflation outlook afforded scope for some further easing of monetary policy, if that were to be needed to give further support to demand at a later stage,” the bank said.

Consumer Prices

Consumer prices probably rose 1.5 percent in the second quarter from a year earlier, slowing from an annual 2.5 percent gain in the first quarter, according to the median estimate of 19 economists surveyed by Bloomberg. The consumer price index will be released at 11:30 a.m. in Sydney tomorrow.

The economy will expand 0.4 percent in the 12 months through June 2010, compared with the Treasury department’s prediction of a 0.5 percent contraction, Chris Richardson, head of Canberra-based Access Economics said in a report today. Three months ago, Access forecast a 0.2 percent decline.

“Australia made it through the most dangerous phase of the global recession with only collateral damage,” Richardson said.

Investors have increased bets Australia’s benchmark interest rate will be higher in 12 months, according to a Credit Suisse Group AG index based on swaps trading.

Traders forecast the key rate will be 76 basis points higher in a year, the index showed at 2:43 p.m. in Sydney. At the start of June, they forecast 3 basis points of reductions. A basis point is 0.01 percentage point.

“We appear to be getting to the bottom end of the interest rate cycle,” Westpac Banking Corp. Chief Executive Officer Gail Kelly said at a business lunch in Sydney today.

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