UK Inflation negative

Britain’s annual retail price inflation rate fell 0.4 per cent in March, turning negative for the first time in nearly 50 years due to falling home loan payments, official data showed on Tuesday. The Retail Prices Index( RPI ) inflation rate, which includes the cost of home loans, sank last month after a flat reading in February, the Office for National Statistics revealed in a statement. ‘For the first time since March 1960, annual inflation measured by the RPI, which includes housing costs such as mortgageinterest payments and council tax, fell below zero,” the ONS said.

The Bank Of England has slashed interset rates six times since October, to the current record-low of 0.5 per cent, as it seeks to lift the country out of recession. “The most eye-catching data saw headline retail prices fall 0.4 per cent year-on-year in March, thereby moving into negative territory for the firt time in 49 years as it was dragged down by sharply reduced mortgage interest rates,” IHS Global Insight economist, Mr Howard Archer noted. Meanwhile, the 12-month consumer price inflation slowed to 2.9 per cent in March owing to sliding domestic gas, housing and transport costs.

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Technology giants go shopping

Most consumers do not want to get a PC  by purchasing microprocessors, hard drives and operating systemm software from different suppliers and assemblin them all into a working computer. They prefer to buy a complete, customised machine from one supplier. Corporate customers increasingly want the same thing: a one stop shop for hardware, software and services. And the largest technology companies are deploying their huge cash hoards to make acquisitions to bolster their ability to be that single provider.

That trend drove Oracle, a leader in business software, to announce Monday that it was spending $7.4 billion to buy an ailing Sun Microsystems and get into the computer hardware business. Oracle beat our rival I.B.M. which considered buying Sun to enhance its own software offerings but ended serious acquisition talks about two weeks ago. “Oracle will be the only company that can engineer an integrated system – applications to disk – where all the pieces fit and work together so customers do not have to do it themselves,” Oracle’s chief executive, Lawrence J. Ellison, said on Monday.

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30 million jobs by 2020

Although Indian IT could now take a year more to touch export revenues of $60 billion – the industry anticipated it could by 2010 – the long term scenario remains promising, trade body Nasscom reassures. If the Indian IT industry can capitalise on emerging opportunities, it can possibly block export revenues of $175 billion by 2020 from under $50 billion currently. Domestic revenues could bulge four times to $50 billion from just $12 billion in 2008. The numbers would inch up the industry’s contribution to annual GDP to 6 per cent from the current 5.5 per cent and its share of annual exports to 28 per cent by 2020 from about 19 per cent now.

In this process, the industry would also create 30 million direct and indirect urban employment. At the moment, the IT sector directly employs a little more than 2 million. However, here’s the caveat. India is likely to lose 10 per cent of its market share to other locations by 2020 if issues such as talent shortage and poor infrastructure are not addressed, Nasscom on Tuesday pointed out, basing its assumptions on a research conducted by McKinsey and Company.

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