On a black day for the UK High Street today, which saw Tesco issue a profit warning that sent its shares plummeting, fears grew that battened-down household spending could already be tipping the UK economy into recession. (...) Shares in Tesco plunged 15%, dragging down with it supermarket rivals Morrisons, J Sainsbury and Marks & Spencer. The dismal outlook was compounded by grim sales figures today from fellow retailers Argos, Homebase, Thorntons and Mothercare. (...) Today's bleak retail news comes alongside weak manufacturing and industrial production figures: official data showed industrial output posted a surprise 0.6% fall in November, raising the prospect the overall economy contracted in the final quarter of 2011. 'There isn't very much that's performing well in the UK economy,' said Philip Shaw of Investec. 'With services seemingly having got off to a very poor start in Q4 (2011), today's data heightens the risk that the UK economy contracted in the final quarter of the year. 'We've been suggesting that the UK will be in recession at the start of this year, but it may have started even earlier,' The Daily Mail reports.

Australia is expected to surpass Qatar as the world's top exporter of liquefied natural gas (LNG) by 2017 after Japan's Inpex Corp committed to a US$34bn export project in Australia's Northern Territory. Inpex, Japan's top oil and gas explorer, and its joint venture partner, Total SA, the French energy company, gave the green light to the project earlier this morning, setting in motion the construction of one of the world's biggest LNG facilities. The project will see natural gas from the Ichthys gas field piped around 800km (497 miles) from the Timor Sea, off the coast of Western Australia, to the coastal city of Darwin in the Northern Territory, The Times reports.

British Gas has become the latest big energy supplier to cut bills, but the millions of households that buy its gas will miss out. Britain's largest supplier yesterday reduced its electricity tariff for 5.3m customers by 5%, or £24 a year, with immediate effect. This equates to a total bill of £439 a year on average. It refused to pass on the recent fall in the wholesale cost of gas, though, which means that gas bills for 9.2m customers remain unchanged. The second-largest supplier, SSE, also joined the price war yesterday. It reduced gas bills for 3.5m customers by 4.5%, or £28, to £742 a year on average from March 26. Electricity prices for its 5.1m customers are being held, The Times says.

NIESR estimated that the UK's gross domestic product grew by 0.1% in the last three months of the year, compared with the third quarter. Despite the gloomy figures, Chancellor George Osborne insisted there were "signs" the economy was turning a corner. He identified the prospect of falling inflation, low interest rates and plans to deal with the record budget deficit as reasons for cautious optimism. "Borrowing is coming down. The job is being done as we talk. Jobs are being created in the private sector," Mr Osborne said in an interview tonight. "One thing you will see this year is a fall in prices, in the rate of inflation," he added, according to The Telegraph.

Delta Air Lines and private equity giant TPG Capital are reportedly considering separate bids for bankrupt American Airlines parent company AMR. Delta is said to have hired Blackstone Group - which helped with Delta's bankruptcy process in 2005 - to help it assess a potential bid, while TPG is expected to look for a strategic partner for any deal. AMR filed for Chapter 11 bankruptcy protection last November and is currently restructuring its debt and cutting annual costs, which it estimates are about $800m (£521m) higher than its domestic competitors. The company's problems present an opportunity for further airline consolidation. Since 2008, three large mergers have reduced competition in the industry, making it easier for carriers to raise prices, The Telegraph reports.

"Beyond the glitz of the Detroit Auto show, and the money poured into the stands, the luxury battle is one that matters for Ford and GM. It's understandable that both companies are tired of being considered the uncool cousin in their own backyard. They've both recognised that American drivers' sense of style and luxury has moved on from an era in which a car's sheer size denoted status. As one industry analyst put it bluntly, the drivers who subscribed to that notion are either dead or should no longer be on the roads. More importantly, though, this is a part of the market that Ford and GM can't afford to be unsuccessful in. It's true that US car sales jumped by just over 10% last year, and most forecasters expect growth of between 5% and 7% this year. But with the US economy showing signs of improvement, the roughly $70bn luxury market in the US will grow faster still, at about 14%, according to RL Polk, an industry research firm," The Telegraph writes.

India's retail sector is expected to swell to $785bn by 2015, making the country irresistible to foreign groups such as Tesco, Wal-Mart and Carrefour of France. Nevertheless, the market is proving a tough nut to crack. (...) Tesco has spent years lobbying for a relaxation of rules banning overseas ownership of supermarkets, but this proved fruitless last month when a U-turn by the Indian Government left foreign multi-brand retailers locked out of the market — forced to watch from the side-lines as "consultants" to domestic operators. (...) Until India's politicians can agree on reforms, Tesco's grand ambitions will remain a tantalising possibility, says The Times.

AB

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