NEW YORK | Thu Aug 9, 2012 11:31am EDT

NEW YORK (Reuters) - Despite a full-time job as a mechanical engineer, Sean Whitney is carving out hours to pursue the new Johns Hopkins MBA/MA in "Design Leadership." Whitney believes the program, a collaboration of the Johns Hopkins Carey Business School and the Maryland Institute College of Art, will teach him management skills while he learns to think more creatively.

His goal: to open his own business designing consumer products. "I have a background in design and this was a good way to blend the two worlds," Whitney, 31, says.

This fall, name-brand schools like Hopkins, Northwestern University, the University of Michigan and Parsons The New School for Design are launching cross-disciplinary masters programs meant to make students more competitive in a changing economy.

While colleges have always tweaked their offerings, the newest crop of programs seems particularly designed for the times: They are multidisciplinary, job focused and often influenced by private industry. They typically involve mixing creativity with management; data-crunching skills with industry-specific content and science with business and management skills.

Some of these new hybrids, especially in the sciences, allow graduates to pursue technical jobs with masters degrees rather than PhDs. In other cases, they reveal the influence of private companies that are helping to fund and design the programs, presumably in ways that will produce graduates the companies want to hire.

"Many institutions are seeing economic difficulties as an opportunity, and there's been an acceleration in interdisciplinary programs," says Debra Stewart, president of the Council of Graduate Schools. She says many of these new programs are a response to the tough economy. Students and schools are looking for ways to stand out in a tight market.

"It's hard to distinguish one MBA from another," says Blair Johnson, a lecturer at Johns Hopkins. "People are looking for much more customized programs."

THE DESIGN CONNECTION

The Hopkins program focuses on combining design and business management -- an idea that has gained popularity since the Stanford School of Engineering founded its much-admired "D-school" in 2005, with help from a donation by Hasso Plattner, co-founder of software giant SAP. In recent months, companies and institutions ranging from SAP to the Rockefeller Foundation and AOL "have reached out to try to recruit our students," says Stanford spokeswoman Debbe Stern.

The 20-month Hopkins program, which started in July, includes business basics like economics, marketing and ethics along with "visualization, prototyping, cultural relevance and awareness, design theory, sustainability and social responsiveness." It was inspired by a collaborative course with the Maryland Institute College of Art in which students produced solutions for design problems presented by Stanley Black & Decker and other companies, says Johnson.

The Parsons New School for Design in New York is launching a Master of Science in "Strategic Design and Management" this fall, and Philadelphia University, which dubs its MBA program "The MBA for hybrid thinkers."

INFORMATION SCIENCE HYBRIDS

At 62, Ronny Schmier is putting aside his anesthesiology practice to study full time in the University of Michigan's new masters program in "Health Informatics." The program will cover medical electronic records and technology that patients use themselves and will tap into health expertise from the university's medical school.

"We are training people to understand policy issues like privacy and security," says program director Charles Friedman. "Some of the other programs are more IT-oriented."

Schmier wants to help design systems allowing physicians to pull patient information from any medical facility. "I'm not a computer geek but I know what needs to be done," he says.

Programs like the one at Michigan focus on combining information technology with the issues of a particular industry. Another approach is to combine management with IT.

At Northwestern, this fall brings a new masters in analytics "bringing together statistics and computer science with a business perspective," says assistant director Chris Bray. IBM, SAS and Teradata have helped shape the curriculum and may offer internships, Bray says.

Math and science college graduates who aren't seeking a career in research (which requires a PhD), can instead earn a professional science masters, or PSM. The curriculum includes graduate-level science or mathematics, often in a newly emerging discipline like bioinformatics or climate science plus course work to help graduates become lab or project managers or to team up with experts in the fields of finance, regulation or intellectual property law.

Helped along by grants from the National Science Foundation, the number of PSM programs grew from 154 to 286 in the past three years, according to the Council of Graduate Schools. This year new programs included "Space Studies" at Rice University and "Pharmaceutical Engineering" at Rutgers.

KICKING THE TIRES AND CHECKING THE SYLLABUS

With more choices - and costs as high as $90,000 for a master's at a prestigious school - prospective students need to do their research. Some of what's happening now "may be marketing: the curriculum may not be new but it has a new sexy name on it," says Christopher Morphew, a professor of educational policy at the University of Iowa in Iowa City.

Students also need to evaluate whether they could get the same training by adding on extras to a traditional degree or double-majoring as an undergraduate.

When considering a relatively untested curriculum or label, students need to be especially careful that it will help them towards their career goals, experts say. "You need to do a deep investigation. The program should be a good and a logical idea and have good hiring rates," says Scott Jaschle, of InsideHigherEd.com, a news and jobs listings website.

But for brand-new programs, no job placement rates will be available. And that may be a reason to wait. Links to local business or big employers are a good sign, especially if they arise from a longstanding focus at the school, says Lois Trautvetter, director of the higher education and administration policy program at Northwestern.

For technically focused job hunters, the PSMs seem a good bet: A survey by the Council of Graduate Schools found that 82 percent of recipients in the 2010-2011 academic year reported finding jobs within two months of graduation.

(This story corrected August 8 story to show that the Stanford School of Engineering - not the Stanford Business School - founded "D-School," in paragraph eight; corrected name of school to Parsons The New School for Design, not Parsons School of Design, in paragraphs three and 10; corrected to show that Parsons offers a Master of Science for design, not an MBA degree, in paragraph 10.)

(Editing by Jilian Mincer, Linda Stern and Kenneth Barry)

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TOKYO | Thu Aug 9, 2012 2:19am EDT

The restructuring costs have already been factored into its earnings forecast for the year to March, it said. (Reporting by Mayumi Negishi; Editing by Chang-Ran Kim)

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The speaker's podium with the logo of Societe Generale bank is pictured during a news conference to present the bank's 2011 annual results in La Defense near Paris February 16, 2012.

PARIS | Thu Aug 9, 2012 7:08am EDT

PARIS (Reuters) - What does every woman want? One French bank thinks it knows the answer: Handbag insurance and a handyman hotline.

The pink-and-gold-colored "Pour Elle" bank card, part of a cut-price summer offer by Paris-based lender Societe Generale, promises to "simplify" women's lives with up to 200 euros ($250) of handbag theft insurance and a dedicated hotline for up to two electrician, locksmith or other handyman callouts per year.

As useful as these products might be, not all women are happy to be singled out by their bank as needing special help.

"It's a little cheeky to promote both at the same time as 'female crises' that could arise," said Lys-Aelia Hart, a 24-year-old assistant art buyer living in Paris. "In my eyes, many men don't know how to deal with a serious electrical issue - on the contrary, they'd probably get killed."

A spokeswoman for SocGen said the cards had been a "great success" and said the bank did not view them as sexist. "We don't think it's a discriminatory approach," she said. "Those who choose these cards are those who wish to adhere to their femininity."

Even men aren't shy about signing up for the card, added the spokeswoman. "Five percent of cardholders are men," she said.

Despite the noble intentions, the card still looks to some like a misguided attempt to cater to women's needs. "I don't need my bank to dictate what kind of services I need, but it's kind of them to offer," said Hart.

(Reporting by Lionel Laurent, editing by Paul Casciato)

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1 of 2. An employee pushes a car engine at a Geely Automobile assembly line in Cixi, Zhejiang province June 21, 2012.

BEIJING | Thu Aug 9, 2012 5:28am EDT

BEIJING (Reuters) - China's factory output growth slowed unexpectedly in July to its weakest in more than three years, underlining stiff global headwinds that may prompt policymakers to take more action to keep growth on track to meet a 7.5 percent annual target.

Retail sales and fixed asset investment also missed market forecasts in official data released in Thursday, increasing expectations that Beijing will act to support an economy that has seen growth sliding for six straight quarters.

Annual consumer inflation, meanwhile, fell to a 30-month low last month, suggesting that the central bank has ample scope to ease policy further after cutting interest rates in June and July.

"We think the weakness will be more stubborn than people had expected," said Li Wei, China economist at Standard Chartered Bank in Shanghai. "My view is that political rhetoric is losing its effectiveness in boosting confidence and you need actual actions to boost growth."

Expectations of more stimulus measures in response to the data boosted riskier assets, with Asian shares rising to a three-month high and the commodity-sensitive Australian dollar testing a 4-1/2-month peak.

Apart from lowering interest rates, Beijing has also cut the amount of cash that banks must hold as reserves (RRR) to free up an estimated 1.2 trillion yuan ($191 billion) for lending in a series of moves since November 2011.

President Hu Jintao and Premier Wen Jiabao have promised to step up policy "fine tuning" in the second half of the year to support the economy.

The central bank is widely expected to continue its gradual policy easing in the coming months to support growth, despite its recent warning that inflation may pick up after August.

The benchmark Reuters poll last month showed analysts expected the central bank to deliver its next interest rate cut in the third quarter and two more cuts in banks' reserve requirement ratio by the end of the year.

"Policy measures the government has taken so far are not enough to stabilize growth and policy support should be stepped up," said Wang Jun, economist at China Centre for International Economic Exchanges (CCIEE), a government think-tank in Beijing.

"On monetary policy, the central bank should cut banks' reserve requirement ratio (RRR) as quickly as possible."

GLOBAL GROWTH FALTERING

China's economy is struggling to escape from the effects of the euro zone debt crisis and a sluggish U.S. recovery that are keeping global growth at a low ebb, the main factor that pushed China's new export orders in July into their steepest fall in eight months.

Weak property investment is hurting economic growth despite a modest pick-up in sales and prices, while falling factory-gate prices cut into corporate earnings and limit capital spending.

The central government has been fast-tracking some infrastructure projects, but its efforts have sparked fears of overcapacity.

Growth-obsessed local authorities have been rolling out some investment projects in recent weeks, but their ability to fund them remains in doubt given more than 10 trillion yuan in local debt - a legacy of the massive stimulus unleashed in 2008/09.

Policy stimulus could give only a limited boost to the economy in the absence of a global recovery, analysts say.

"Economic growth in the third quarter is likely to remain sluggish. Growth may show some improvement from September," said Zhang Hanya, a researcher with the National Development and Reform Commission, the country's top planning agency.

FORECASTS MISSED

China's industrial output growth slowed to 9.2 percent year-on-year in July, its weakest since May 2009, down from 9.5 percent in June and below the 9.8 percent forecast in a Reuters poll.

Annual growth in fixed-asset investment, in the likes of real estate, roads and bridges, came in at 20.4 percent in January-to-July, unchanged from the January-to-June period and just below the 20.5 percent forecast.

Growth of retail sales, the biggest driver of the economy's expansion in the first quarter, eased to 13.1 percent, short of the forecast of 13.7 percent.

Economic growth has been sliding since the beginning of 2011, reaching 7.6 percent in the second quarter, the weakest pace since the global financial crisis.

Analysts polled before the data had expected to see a pick-up in growth in the third quarter to 7.9 percent and full-year growth of 8 percent, above the official target.

Barclays Capital cut its 2012 China GDP growth forecast to 7.9 percent from 8.1 percent after Thursday's data.

Annual consumer inflation eased to 1.8 percent in July from 2.2 percent in June, pulling back further from a three-year high last July of 6.5 percent. Economists polled by Reuters had forecast inflation to ease to 1.7 percent in July.

"This number gives more room for policy easing," said Zhang Zhiwei, chief China economist at Nomura in Hong Kong.

"It is now pretty clear that CPI will likely be below the official 4 percent target for the year, so the policy focus for the government can stay clearly on growth."

Consumer prices edged up 0.1 percent in July from the previous month, compared to expectations of a 0.1 percent drop.

July's data showed that producer prices fell in July by 2.9 percent from a year earlier, a sharper decline than the 2.5 percent forecast and the steepest fall since October 2009. It marked a fifth straight month of falling producer prices.

(Additional reporting China economics team; Editing by Alex Richardson)

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Employees of Standard Chartered leave a branch of the bank in central Seoul August 9, 2012.

LONDON | Thu Aug 9, 2012 2:36pm EDT

LONDON (Reuters) - Standard Chartered is failing to convince some shareholders of its defense against allegations it broke U.S. sanctions on Iran, leaving them worried about possible lawsuits, fines and the loss of top executives.

StanChart, which has cherished its image as one of the cleanest names in global finance, lost more than a quarter of its market value in 24 hours after New York's banking regulator accused it on Monday of assisting $250 billion of money-laundering transactions over nearly 10 years.

Despite StanChart's protests that just $14 million of deals flouted the U.S. rules, its shares are still around 15 percent below levels before the New York State Department of Financial Services (DFS) branded it a "rogue institution".

"Even if it is only $14 million, they have still committed a crime, and they are still guilty," one of the 10 biggest institutional investors in the bank told Reuters, explaining why the shares remained depressed.

"And if this is hot air and they are just bluffing, then they are playing a very dangerous game," the investor said, putting the risk of either chief executive Peter Sands or Chief Financial Officer Richard Meddings quitting the bank at "5-8 percent and rising".

The bank could face a huge fine and even its state banking license is under threat, a punishment that would paralyze its U.S. operations and relegate the London-listed institution to the second tier of global banks.

The accusations could end up harming StanChart's 'AA-' credit rating, Fitch Ratings said.

Speculation that StanChart could sue the New York regulator for injury to its reputation and stock price were adding to worries about the potential loss of U.S. business, one of the 25 biggest investors in the bank said.

"I think the phrase 'Don't fight the Fed' applies in more ways than just one. Who knows what else the regulator could unearth if they really wanted a fight?" he said.

"(StanChart) tend to have a chippy approach which doesn't always win friends, and they need to be careful ... I would rather see them settle and leave this whole sorry saga behind them."

London lawyers echoed the warning.

"It's very difficult to say whether Standard Chartered believe they have a case without knowing all the details ... but I think history tells us that it is extremely tough to take on the U.S. regulators and win," Tom Hibbert, head of the banking litigation group at City of London law firm RPC.

OVERVALUED?

Standard Chartered's stock was already ripe for a sell-off even before its high-profile tussle with U.S. regulators came to light, analysts at Canaccord Genuity said.

Low exposure to the euro zone's troubles, healthy capital reserves and a halo burnished by steering clear of the interest rate manipulation scandal tainting other banks have given it a trading premium so wide that returns could only be reached through "near flawless execution of ambitious consensus estimates".

"To our mind the stock is priced for everything to go right, and nothing to go wrong," the analysts said, maintaining their advice to sell the stock.

The bank's woes offer a timely reminder of the risks investors face by supporting lenders with deep roots in emerging markets, said Jeff Yeh, Chief Investment Officer at Capital Investment Trust in Taipei, with about $5 billion in assets.

"I think the events of the past few days really drove home that point, and I think a growing number of funds may not be as comfortable with these large banks as they used to be."

While quick to deny the money laundering allegations in the press, some say StanChart's lack of direct communication with shareholders is limiting its share price recovery.

"They haven't been in touch with us, which surprises me, because when they had rights issue one, two and three, they were in touch well in advance, but this time, not a tweet," the top 10 investor said.

"We have been proactive in reaching out to all our investors, both shareholders and debtholders, and the process is ongoing," a spokesman for Standard Chartered said.

It will not want to lose the goodwill of those such as Hugh Young, managing director of top-five StanChart shareholder Aberdeen Asset Management Asia, who is giving it the benefit of the doubt for now.

"It's something to worry about, although I noticed a lot of emotive and sensational language which slightly diminishes the allegation ... The StanChart we recognize is not the rogue bank portrayed in the allegation," he said.

(Reporting by Sinead Cruise, additional reporting by Sarah White, Sudip Kargupta, Kelvin Soh and Denny Thomas; Editing by Will Waterman and Matthew Tostevin)

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* Plans to pay minimum 2012 dividend of 0.70 euro/shr

* Q2 adj. EBITDA flat at 4.7 bln euros

* Still sees 2012 adj. EBITDA at around 18 bln euros

* Shares up 0.85 percent in early trade

By Harro Ten Wolde

FRANKFURT, Aug 9 (Reuters) - Deutsche Telekom stuck by plans to pay a dividend of at least 0.70 euros per share for 2012 as cost-cutting in its German and U.S. markets helps it buck a trend among competitors who have been slashing their payouts to shareholders.

The company posted second-quarter operating profit on Thursday that was in line with estimates and kept its outlook for 2012 underlying earnings excluding special items to ease to around 18 billion euros from 18.7 billion last year.

Most European telecom groups saw profits fall in the first half of the year and were forced to cut dividends as a cocktail of tough price competition, regulatory changes, and lower spending by recession-weary consumer hurt revenues.

"We are keeping our word and providing a good deal of reliability to the market with very solid figures," said Chief Executive Rene Obermann.

Earnings before interest, tax, depreciation and amortisation (EBITDA), excluding special items, were flat at 4.7 billion euros ($5.8 billion) in the three months through June, at the high end of a range of forecasts in a Reuters poll.

Deutsche Telekom shares opened up 0.85 percent, ahead of a 0.3 percent rise on the German blue chip index.

"We expect these generally solid results to be taken well against a weak European peer backdrop," said analyst Simon Weeden at Citi Research.

OUTPERFORMING

The European telecom index is roughly flat so far this year, largely underperforming most other big sectors like pharma, media, and chemicals.

But Deutsche Telekom's shares have done better than those of peers because of its unchanged dividend policy, while Telefonica and France Telecom shares have fallen because of tough domestic markets.

Deutsche Telekom's shares trade at 15 times 12-month forward earnings, above France Telecom and Telefonica, which trade at multiples of 9 and 8.4 respectively.

The company said revenues and operating profits in Europe suffered from the economic crisis, while its U.S. operation T-Mobile USA improved its operating profit due to cost-cutting.

At the same time it lost 205,000 customers in the United States after adding 187,000 clients in the first quarter.

Deutsche Telekom tried to sell its U.S. business, once a strong growth engine, to AT&T for $39 billion but fierce regulatory opposition scuppered the deal, leaving the German company with a $6 billion breakup package.

Over the next two years, network investments at T-Mobile USA will increase by about $1.4 billion. Over time, T-Mobile USA will spend a total of $4 billion on upgrading its network for high-speed wireless services based on a technology known as Long Term Evolution (LTE).

In Europe smartphones such as Apple's iPhone and Samsung's Galaxy now account for 60 percent of all devices sold, fuelling mobile data revenues, which grew by 21.2 from last year, Deutsche Telekom said.

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CHICAGO | Thu Aug 9, 2012 8:18pm EDT

CHICAGO (Reuters) - A ruling in the case of failed futures brokerage Sentinel Management Group could make it more difficult for customers to recoup money lost in the much larger collapse of MF Global, according to Sentinel's bankruptcy trustee.

A federal appeals court on Thursday upheld a ruling that puts Bank of New York Mellon ahead of former customers of Sentinel in the line of those seeking the return of money lost in the 2007 failure of the suburban Chicago-based futures broker.

The appeals court affirmed an earlier district court ruling that the bank had a "secured position" on a $312 million loan it gave to Sentinel, which turned out to have been secured by customer money.

Futures brokers are required to keep customers' funds in dedicated accounts to protect them from being used for anything other than client business.

However, Thursday's ruling suggests that brokerages can use customer funds to pay off other creditors, Sentinel trustee Fred Grede told Reuters.

"I don't think that's what the Commodity Futures Trading Commission had in mind" with its requirement that brokers keep customer money separate from their own, he said.

"It does not bode well for the protection of customer funds."

Worse, Grede said, is that the ruling suggests that a brokerage that allows customer money to be mixed with its own is not necessarily committing fraud.

That may raise the bar for proving that MF Global Holdings Ltd, under then-CEO Jon Corzine, misused customer funds as it scrambled to meet margin calls to back bets on European debt in the brokerage's final days. A $1.6 billion customer shortfall remains.

Corzine has said he did not know about the transfer of any customer money.

"I'm sure Mr. Corzine's attorneys will get ahold of this ruling and use it for all it's worth," Grede said.

A lawyer for Corzine, who has not been charged with any crimes, did not immediately respond to a request for comment.

CORZINE MAY STILL FACE SCRUTINY

CME Group Executive Chairman Terrence Duffy, whose firm was MF Global's frontline regulator, has said MF Global made unlawful transfers of customer money to plug its own liquidity needs.

James Koutoulas, head of the Commodity Customer Coalition, which has been an advocate for MF Global clients, said Corzine could still face scrutiny for the transfers.

The Sentinel ruling is "not an end-all-be-all acquittal for Corzine," he said.

Sentinel allegedly pledged hundreds of millions of dollars in customer assets to secure an overnight loan at Bank of New York Mellon, leaving the bank in a secured position but Sentinel's customers out millions.

Customer funds were allegedly moved from the protected accounts to other accounts so they could be used as collateral for loans to Sentinel's own trading operations.

The appeals court said that "perhaps the bank should have known that Sentinel violated segregation requirements" but agreed with the district court's earlier ruling that "such a lack of care does not rise to the level of the egregious misconduct" needed to reprioritize a claim.

"That Sentinel failed to keep client funds properly segregated is not, on its own, sufficient to rule as a matter of law that Sentinel acted ‘with actual intent to hinder, delay, or defraud' its customers," U.S. Circuit Judge John D. Tinder wrote in the ruling.

The decision was a blow for Grede, who had sought to strip Bank of New York Mellon of its secured position.

Sentinel, whose customers are missing about $600 million, largely managed money for other futures brokers, delivering outsized returns that, Grede says, were juiced up by improperly using customer money to secure loans that went to fund risky trades.

The scheme unraveled when the credit crisis hit in the summer of 2007.

(Additional reporting by Jonathan Stempel in New York; Editing by Gary Hill and Phil Berlowitz)

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1 of 11. Children watch the fireworks during a ceremony marking the first anniversary of Tripoli's liberation in Tripoli, August 8, 2012.

TRIPOLI | Thu Aug 9, 2012 1:29am EDT

TRIPOLI (Reuters) - Libya's ruling council handed over power to a newly elected national assembly on Wednesday in the North African country's first peaceful transition of power in its modern history but which comes amid heightened violence.

In a late-night ceremony held under tight security in Tripoli, the National Transitional Council (NTC), political arm of the opposition forces that toppled Muammar Gaddafi a year ago, handed over to the national congress, elected in July.

NTC Chairman Mustafa Abdel Jalil symbolically passed on the reins to the oldest member of the new 200-member assembly, Mohammed Ali Salim.

"The National Transitional Council hands over the constitutional duties for leading the state to the general national congress, which from now on is the sole legitimate representative of the Libyan people," Jalil said to loud cheers.

In a speech, Jalil, who announced he would retire after ending his NTC chief post, acknowledged "mistakes" had been made during an "extraordinary" transitional period and said security and disarmament issues had not been resolved in time.

The congress, whose members took an oath led by Salim, will now name a new chairman while the NTC will be disbanded. A first meeting was scheduled after the ceremony.

Large crowds gathered in Tripoli's Martyrs Square to celebrate the handover as fireworks lit up the sky.

The assembly will name a new prime minister who will pick his government, pass laws and steer Libya to full parliamentary elections after a new constitution is drafted next year.

A liberal coalition led by wartime rebel prime minister Mahmoud Jibril won 39 of the 80 party seats in the congress, while its Islamist rivals, the Justice and Construction Party - the political wing of the Muslim Brotherhood - won 17.

However the remaining 120 seats are in the hands of independent candidates whose allegiances are hard to pin down.

In the battle to hold sway over the assembly, where key decisions will require a two-thirds majority, Jibril's National Forces Alliance and the JCP are scrambling to form alliances with independents and smaller parties.

Some independents, distrustful of both sides, have spoken of forming their own coalition.

SECURITY PROBLEMS

Getting a grip on security in an often anarchic post-Gaddafi Libya will be the priority for the country's new rulers, Deputy Prime Minister Mustafa Abu Shagour earlier told Reuters.

The run-up to the transition has been overshadowed by several violent incidents in the past week that have shown the country's precarious stability.

These include a car bomb in Tripoli near the offices of the military police and an explosion at the empty former military intelligence offices in the eastern city of Benghazi, the cradle of the revolt against Gaddafi.

"Clearly they worry us, but at the same time we are investigating them. We are trying to find out who is behind this," Abu Shagour said. "We were able to improve security from when we started, but there's still a way to go. Security is top of the agenda for whomever will be coming into power."

The interim authorities that took over after Gaddafi's overthrow successfully led Libya to the elections. But the government has struggled to impose its authority on a myriad of armed groups who refuse to lay down their weapons.

On Sunday, security forces killed three armed men suspected of being behind seven failed bomb plots. That same day, the International Committee of the Red Cross suspended its work in Benghazi and the port city of Misrata after one of its compounds was attacked with grenades and rockets.

This followed the kidnapping of seven Iranian aid workers by armed men in Benghazi on July 31.

Still, Abu Shagour expressed optimism that the problems could be overcome. "I don't think it is going to get worse, I think things will get better as we move on. Our security forces are getting better," he said.

The date of the handover is symbolic - corresponding to 20 Ramadan, the Muslim fasting month, in the Islamic calendar. Last year, 20 Ramadan was Aug 20 - when rebels overran Tripoli, forcing Gaddafi to flee.

(Editing by Michael Roddy and Philip Barbara)

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Thu Aug 9, 2012 9:16am EDT

n">(Reuters) - Things are tough in Britain, and meaningful help most certainly is not on the way.

There were three main messages coming out of the Bank of England's gloomy Inflation Report, and Mervyn King's press conference afterwards:

First - growth and inflation are falling sharply, with zero growth expected this year and every chance inflation over the medium term will fail to hit the Bank of England's 2 percent target.

Second - the BOE is both puzzled by this and intends to do very little about it.

Third - the BOE doubts, in some respects, the value of the steps it could take.

This simply goes to show the limits of monetary policy during a massive global deleveraging, especially one, like our own, in which banks are being kept on life support rather than allowed to sink or float on their own merits.

"We will get back but it's quite impossible to know over what time period. There is no historical precedent of an event of this kind leading permanently to the end of economic growth and I don't think it will here either," King told reporters, but added: "There is still a long way to go".

The bank's forecasts have certainly come a long way in a short time. In May it was predicting 0.8 percent growth for the year. Its mid-range forecast for inflation now shows it below the 2 percent target for most of the next three years, a figure that takes as an input a market assumption of one more cut in rates next year, from a half a percent to 0.25 percent.

Even King is not so sure this will help: "I don't think a change in Bank rate is going to make much of a difference. It's going to be more counterproductive than not at this point."

He expressed concern that lower rates would hurt margins at some banks, further impairing them and theoretically making loans, already scarce, that much harder to get. That's because many loans in Britain are tied to the official rate, but bank funding in the markets, rather than tracking the base rate, is being driven by perceptions of bank risk. Monetary policy transmission is impaired, and gets worse every time markets begin to worry more about the state of the euro zone.

HIGH DEBTS, HIGH PAIN

That makes more quantitative easing a more likely outcome, but neither the report nor the press conference gave the impression that much was on the way.

There is also the question as to how effective QE has been and can be. The BOE is extremely reluctant to infringe on government's right to run fiscal policy, and so direct Zimbabwe-style financing of the deficit seems unlikely. While it is debatable how much of a buffer QE has provided, the fact remains that growth since the onset of the great financial crisis has been abysmal in Britain. A Bank of England study from earlier this year maintains that QE has pushed rates down by about 150 basis points and increased asset values by 20 percent over what they already would have been, implying a peak impact on real GDP of about 2 percent by the middle of 2011.

That's impressive, but only underscores exactly how difficult Britain's position is. It is in the midst of an austerity which is certainly making things worse in the near term. Moreover the size of its debts, public and private, and the composition of its economy make it particularly vulnerable.

On a total debt-to-GDP basis Britain is carrying a heavier load than Spain and Greece, much less the U.S. Its financial sector, which is much too large for its economy, desperately needs to shrink, both because the rest of the world is no longer interested in providing it with cheap funding, and as a matter of safety for the economy. While its manufacturing sector has done well recently, the threat of a euro-led slowdown in global demand is real. Households too are neck deep in debt and not able to serve as the engine of growth.

To be sure, Britain is no Greece or Spain. It has its own currency to devalue, and its own central bank to serve as a lender of last resort. That makes a euro-style financing crisis less likely. It does not make the road back to sustainability all that much less long.

Britain isn't just trying to come to terms with its own debt burden and banking system, it is trying to do it while the rest of the world does the exact same thing.

Growth and inflation may be subdued for longer than the Bank of England forecasts.

(James Saft is a Reuters columnist. The opinions expressed are his own)

(Editing by James Dalgleish)

(At the time of publication, Reuters columnist James Saft did not own any direct investments in securities mentioned in this article. He may be an owner indirectly as an investor in a fund. For previous columns by James Saft, click on)

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A man looks at food at Khartoum's central food market July 18, 2012.

ROME | Thu Aug 9, 2012 5:11am EDT

ROME (Reuters) - The world could face a new food crisis of the kind seen in 2007/08 if countries resort to export bans, the UN's food agency warned on Thursday, after reporting a surge in global food prices due to a drought-fuelled grain price rally.

A mix of high oil prices, growing use of biofuels, bad weather, restrictive export policies and soaring grain futures markets pushed up prices of food in 2007/08, sparking violent protests in countries including Egypt, Cameroon and Haiti.

Concern about extreme hot and dry weather in the U.S. Midwest sent corn and soybean prices to record highs last month, driving overall food prices higher again and reversing the Food and Agriculture Organisation's expectations for steady declines this year.

"There is a potential for a situation to develop like we had back in 2007/08," FAO's senior economist and grain analyst Abdolreza Abbassian told Reuters.

"There is an expectation that this time around we will not pursue bad policies and intervene in the market by restrictions, and if that doesn't happen we will not see such a serious situation as 2007/08. But if those policies get repeated, anything is possible."

Grain markets have been boosted by speculation that Black Sea grain producers, particularly Russia might impose export restrictions after a drought there hit crops.

Markets drew a little comfort from official Russian comments on Wednesday that the country saw no grounds to ban grain exports this year but did not rule out protective export tariffs after the end of the 2012 calendar year.

The FAO Food Price Index, which measures monthly price changes for a food basket of cereals, oilseeds, dairy, meat and sugar, averaged 213 points in July against 201 points in June, the FAO said in its monthly index update.

The rise followed three months of declines. Although below a peak of 238 points in February 2011, when high food prices helped drive the Arab Spring uprisings in the Middle East and North Africa, the index is still higher now than during the food price crisis in 2007/08.

Higher food prices mean higher import bills for the poorest countries, which do not produce enough food domestically.

Charity Oxfam said that the surge in grain prices could drag millions of people around the world into conditions of hunger and malnourishment, in addition to nearly one billion who are already too poor to feed themselves.

Abbassian said the situation was still quite different from 2007/08, when crude oil prices were at record levels, adding to farmers' costs.

Abundant supplies of rice and sluggish economic growth should also ease the upward pressure on prices, but a lot will depend on how the weather develops for U.S. crops and how much demand will be rationed in coming months, he said.

The Rome-based food agency usually does not release the food price index this month but it has broken with tradition due to the exceptional market situation.

It did not update its supply and demand outlook for cereals on Thursday as it does during a normal release. The U.S. Department of Agriculture (USDA) will publish its August crop production and supply/demand report on Friday.

(Reporting By Catherine Hornby; editing by Veronica Brown and Keiron Henderson)

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