Business news for Mon, 17 Dec 2007 & with word costs. 14 news.

LONDON led the biggest drop in United Kingdom home values for at least five years this month as higher mortgage costs and the prospect of further declines in prices kept away buyers, a report by Rightmove Plc showed. The average UK asking price fell 3.2 percent to 232,396 pounds (US$473,437) from November, the largest decline since the survey of real-estate agents' listings began in 2002, Britain's most-used property Website said yesterday. London home costs dropped 6.8 percent, also the most recorded by Rightmove. "The market is tough out there," Miles Shipside, the company's commercial director, said in an interview with Bloomberg News. "We see a flat outlook for next year, with no price rises, as we work our way through this liquidity crisis." The Bank of England this month cut the benchmark interest rate for the first time in two years, citing the threat of an economic slowdown. Confidence among British real-estate agents has slumped as pricier mortgages

CHINA will eliminate export tax rebates on major grains as part of a series of measures to ensure domestic supplies are adequate and to control rising food prices. Tax rebates on wheat, rice, soybeans and corn will be eliminated from December 20, according the Website of the central government yesterday. China's food costs gained 18.2 percent last month, pushing inflation to the highest in 11 years. The government has sold corn and vegetable oil from state reserves and asked local authorities to boost emergency stockpiles to ensure stability, according to Bloomberg News. "This is bearish for local wheat and corn markets as it adds a few million tons to supply," said Zhao Qiang, research manager at Tianqi Futures Co in Harbin. "The effect on global markets will be small as China's exports are limited." China shipped 4.9 million tons of corn and 1.2 million tons of rice overseas in the first 11 months of this year.

EUROPE'S manufacturing and service industries grew at the slowest pace in more than two years this month because of increases in energy and food prices and borrowing costs. Royal Bank of Scotland Group Plc said yesterday a preliminary estimate of its composite index fell to 53.3 from 54.1 in November. That's the lowest since August 2005 and lagged behind the 53.7 median of 15 forecasts in a Bloomberg News survey. A reading above 50 indicates growth. Europe's economy is heading for its slowest growth in three years in 2008 due to a near-record level for the euro, a 50 percent increase in crude oil prices, and higher lending costs. While the European Central Bank this month cut its forecast for economic growth next year, it's held off reducing interest rates as the inflation rate reached a six-year high. "The index is consistent with below-trend growth in the euro zone and this will continue until at least the second quarter 2008," Marco Valli, an economist at

Voracious demand for books and a crackdown on small, polluting paper mills have caused a paper shortage in China. So far the problems have been largely confined to China, but experts say that if the trend is unchecked, publishers worldwide could find themselves paying higher costs.

Texas is in "relatively decent shape" to cover the pension promises made to state workers, but it's behind most states in planning for roughly $37 billion in future health care costs, according to a report released this week.

NEW YORK (MarketWatch) -- Marshall & Isley on Monday said it's booking a one-time, after-tax charge of $48 million in connection with the retirement of $1 billion of Puttable Reset Securities. M&I expects to recover this charge through lower financing costs over the next three years. It also expects fourth-quarter charge-offs of up to $195 million and a loan loss provision of up to $235 million for its loan portfolio. "Despite these challenging market conditions, we are fortunate to have one of the strongest capital positions in the industry," said Mark Furlong, president and CEO, Marshall & Ilsley Corporation. "We believe we are well positioned to weather the downturn in the real estate market."

Transport group Arriva today says more services and bigger passenger demand is protecting its bus operation from a year-on-year rise in fuel costs.

Australian property trusts Centro Properties and Centro Retail slashed earnings forecasts because of higher refinancing costs and said they may sell U.S. assets. Investors stripped a combined $4.19 billion from their market value.

LONDON (MarketWatch) -- Citigroup downgraded U.K. beverage can maker Rexam to hold from buy, citing rising oil and energy costs as well as weakening demand in parts of its plastic packaging division. "Plastic packaging has seen growth in healthcare and dispensing systems but more recently home and personal care markets have softened," Citigroup said. The broker also cut its target price to 440 pence from 575 pence.

It's not just the plane that soars when you travel overseas: phone bills have a way of taking off, too. Using digital plans to prepaid cards can limit your costs.

Despite having low income tax growth, coupled with rising materials and health care costs, Dayton city officials plan to boost next year's budget by $2 million.

THE stock market slumped more than 3 per cent in afternoon trading, amid concerns some local companies are being hurt by rising borrowing costs.

SECURITIES in Centro Properties Group plummeted more than 65 per cent today after it slashed its distribution forecasts due to higher funding costs.

The CBI downgrades its economic forecast for 2008, following credit problems and surging energy costs.