Finance news. My opinion.

The spending cuts that helped the U.K. preserve its AAA credit rating last year and bolstered the pound are now weighing on the currency as investors lose confidence that Prime Minister David Cameron will revive economic growth.

Sterling had its worst January since 2008, falling 0.6 percent, after a 3.1 percent advance in the second half of 2011, according to Bloomberg Correlation-Weighted Indexes that track 10 developed-market currencies against each other. Gilts are lagging behind lower-rated Treasuries, after world-beating gains of almost 17 percent last year.

Investors are beginning to favor policies promoting growth over austerity just as the biggest government-spending squeeze since World War II risks sending the U.K. into its second recession since 2009. U.S. President Barack Obama has used outlays to drive America

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WASHINGTON • The economy grew late last year at a pace that in normal times would suggest it’s healthy.

But the 2.8 percent annualized growth rate in the October-December quarter — the fastest pace since the spring of 2010 — isn’t being cheered by most economists or investors. That’s because growth would need to be much stronger to sharply reduce unemployment. And signs in the data point to slower growth ahead.

For all of last year, the economy grew just 1.7 percent. That was barely more than half the growth in 2010. The outlook for all 2012 is slightly better. The Federal Reserve estimates growth of roughly 2.5 percent for the year.

Though the economy has picked up and is far stronger than during the Great Recession, unemployment is still a high 8.5 percent. Many people remain reluctant to spend more or buy homes. Many employers are still hesitant to hire.

For the final three months of 2011, Americans spent more on vehicles, and companies restocked their shelves at a robust pace. But overall growth last quarter — and for all of last year — was held back by the sharpest cuts in annual government spending in four decades, the Commerce Department said Friday.

Several factors are expected to exert more of an economic drag this year: Cuts in military and other federal spending. A slower pace of company restocking. Weak or flat pay increases. Sluggish growth in consumer spending.

“Overall, the pickup in growth doesn’t look half as good when you realize that most of it was due to inventory accumulation,” said Paul Ashworth, an economist at Capital Economics, who expects growth to slow to below 2 percent in the first three months of this year.

In the final three months of last year, consumer spending grew at a 2 percent annual rate. That’s up modestly from the third quarter. Consumer spending is important because it makes up 70 percent of economic activity.

Much of the growth was powered by a 14.8 percent surge in sales of autos and other long-lasting manufactured goods.

Incomes, which have been weak all year because of high unemployment, grew at a modest 0.8 percent annual rate. That followed two straight quarters of declining incomes. But unless pay increases pick up, consumers who have dipped into savings in recent months may pull back.

Business restocking, which can vary widely from quarter to quarter, was the greatest contributor to growth in the October-December period. It added nearly 2 percentage points to the gross domestic product, or GDP.

Government spending at all levels fell at an annual rate of 4.6 percent in the fourth quarter and 2.1 percent for the year — the biggest decline since 1971. Sweeping federal defense cuts at the beginning and end of 2011 were a major factor.

The economy is measured by GDP, which covers everything from haircuts to hotel bookings to jet fighters. Friday’s estimate was the first of three for the fourth quarter.

Other data show that in some ways, the economy ended 2011 on a strong note. Companies invested more in equipment and machinery in December. The unemployment rate fell to 8.5 percent last month — the lowest level in nearly three years — after the sixth straight month of solid hiring.

People are buying more cars, and consumer confidence is rising. Even the depressed housing market has shown enough improvement to make some economists predict a turnaround has begun.

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The Crowne Plaza hotel near Lambert-St. Louis International Airport is facing foreclosure next month.

An analyst said Thursday the hotel is among about 17 hotels, all owned by Columbia Sussex Corp., pushed toward default by Wachovia. Foreclosure of the Crowne Plaza is scheduled for Feb. 14.

A hotel representative referred questions to Crescent Hotels and Resorts, of Fairfax, Va., the Crowne Plaza’s operator. Crescent’s corporate counsel and a spokesman for Columbia Sussex, based in Crestview Hills, Ky., did not return calls seeking comment.

Owner Gary Andreas of H&H Financial Group Inc., a hotel consultant, said the Crowne Plaza, just west of Lambert on Interstate 70 at Lindbergh Boulevard, has struggled recently in the all-important category of revenue per available room, or REVPAR.

“Suffice it to say the REVPAR had been declining for the last three years,” he said. “This year it had essentially bottomed out quick cash. It was at a level that it would be difficult for a full-service hotel to survive.”

Wachovia, now Wells Fargo, was the lender on the package of Columbia Sussex hotels put on a “default schedule” in 2010, Andreas said. That move indicated that the hotels’ debt exceeded the amount the lender was willing to refinance, he said.

“It’s almost like a preforeclosure,” Andreas added.

Efforts to reach a Wells Fargo representative were unsuccessful.

The 351-room Crowne Plaza, built in 1990, opened as a Radisson hotel. The eight-story hotel is notable for the sharp-angled design similar to others that Andreas said were completed in the early 1990s in Pittsburgh and Cincinnati.

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Shares in Research In Motion are sharply higher amid a new report that the BlackBerry maker is considering selling all or parts of the company.

The report, from The Boy Genius Report blog, which closely follows RIM, says South Korean electronics giant Samsung is the frontrunner among possible bidders for assets of the Waterloo, Ont.,-based maker of smartphones and other products.

The Boy Genius Report also says RIM is currently in talks to license its software to other vendors.

It says one of RIM’s biggest assets is its BlackBerry Messenger instant texting service, which would allow Samsung to differentiate itself from the Android operating system that it uses in its smartphones.

Shares in RIM, which has been the subject of takeover or sale rumours for months, were up 61 cents at $17.47 in afternoon trading after been up more than 75 cents in earlier trading.

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The cost of living in the U.S. was probably little changed in December as stores discounted merchandise during the holidays, supporting the Federal Reserve

The leaders of Germany and Italy sought to present a united front Wednesday in the fight to resolve the eurozone debt crisis and revive the ailing European economy.

German Chancellor Angela Merkel praised the efforts of Italian Prime Minister Mario Monti to cut government spending and make his nation’s economy more competitive.

"We have followed with great respect how quickly the measures are being implemented," said Merkel. "The work of the Italian government is being honored."

Monti said Italians support a "very hard series of measures," adding that Europe "doesn’t have to fear any more that Italy is a possible source of contagion."

Italy has been a big worry for global investors in recent months. The nation’s economy has been stagnant for a decade and its borrowing costs have ballooned, raising concerns about the government’s solvency.

Monti acknowledged that high interest rates could have been justified when market participants were uncertain about Italy’s economic policies. "But not anymore," he said, adding, "especially after representatives of those same markets have said they appreciated the efforts [Italy] made."

That assertion will be put to the test this week when the Italian government will offer €8.5 billion in bills Thursday and up to €4.75 billion in bonds Friday.

On Wednesday, yields on 10-year Italian bonds eased, but still held above the key 7% threshold.

Europe’s debt crisis: An end in sight? Not so fast

The meeting in Berlin between Merkel and Monti was the latest in a series of talks this week among top European Union leaders as they piece together a solution to the long-running government debt and banking problems in the eurozone.

Merkel met with International Monetary Fund director Christine Lagarde late Tuesday and French President Nicolas Sarkozy Monday. Lagarde will meet with Sarkozy later Wednesday in Paris.

Merkel and Sarkozy will travel to Rome for more talks with Monti on Jan 20. Then, the top leaders of all 27 members of the EU will gather in Brussels on Jan. 30 for their first summit of the year.

On Wednesday, Merkel and Monti discussed the situation in Greece, where Prime Minister Lucas Papademos is under pressure to push through reforms needed to secure additional bailout funds.

Merkel said the first step in resolving the debt crisis is to "create the preconditions" for a second bailout for Greece fast payday loan.

EU leaders agreed in October to provide a second €130 billion rescue package for Greece and announced a deal with private sector investors to voluntarily write down the value of Greek government bonds by 50% as part of a debt exchange.

But negotiations with the private sector have stalled and there is still disagreement among some policymakers over whether requiring Greece to enact more austerity as a condition of a second bailout will help or hurt the nation’s fragile economy.

"The talks with banks are being pushed so that the question of Greece can be solved rationally, so that we can then focus on structural reforms in the euro zone as a whole," said Merkel.

Europe: Still a huge pain in the neck for investors

Still, European leaders are optimistic that a proposed fiscal compact, designed to ensure that governments do not spend beyond their means and rack up unsustainable debts, will be signed by the end of the month.

"There is work to be done but there is a good chance that we can expect significant progress or a political conclusion already on Jan. 30," said Merkel.

The terms of the pact include, among other things, a balanced budget requirement with an "automatic correction mechanism," and a provision to make national budget policies subject to EU authority "ex ante," or before the fact.

The political leaders of the 17 eurozone nations, which share the embattled single euro currency, agreed in principle to abide by the pact following a summit on Dec. 9. But the agreement is still subject to parliamentary approval in some member states.

Merkel also suggested that Germany, the eurozone’s largest economy, could commit more capital to the European Stability Mechanism, which is expected to come into effect this year.

But Merkel was careful to say that Germany would contribute more capital to the fund only if necessary and other eurozone governments do the same.

The ESM would enhance or replace the eurozone’s current bailout fund, known as the European Financial Stability Facility. European leaders have said they will decide in March on a proposal to put more capital into the €500 billion ESM.

– CNN’s Diana Magnay contributed reporting from Berlin. 

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The King of Beers slipped another notch down the list of beer royalty in 2011.

Sales of Budweiser fell 4.6 percent last year, according to estimates by Beer Marketers Insights, to 17.7 million barrels, while Coors Light eked out a 0.8 gain to 18.2 million barrels. That means the Silver Bullet is now the nation’s second best-selling beer, after Bud Light.

It’s the first time in almost two decades that Anheuser-Busch (now Anheuser-Busch InBev) couldn’t claim the country’s two top brews, and it comes amid a long decline for the company’s flagship lager. Bud’s 4.6 percent decline actually marks its best performance in some time – sales fell nearly 10 percent in 2009 – and ABI has said one of its top priorities is to boost sales of the brand, both in the U no fax payday loans.S. and overseas.

Both ABI and Miller Coors saw overall shipments fall last year – 2.9 percent and 3 percent, respectively – amid a tough sales climate for the beer industry. ABI sold less beer in 2010 than it did in 2000, Beer Marketers estimates. But its income on those sales nearly doubled.

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Stocks barely budged Wednesday, and investors held on to their gains from a strong opening to the year. It wasn’t much, but after the lurching, up-and-down weeks of 2011, investors were grateful for the winning streak.

Strong December sales helped the stocks of automakers and specialty stores. Banks, health care companies, and utilities fell slightly. Netflix surged after its first good news in months.

But nothing else moved much. The Dow Jones industrial average edged up 21.04 points, or 0.2 percent, to close at 12,418.42. The Dow opened the year with a 180-point gain Tuesday, which brought it to the highest level since July.

“At least thus far in 2012 we haven’t followed the path of 2011, where if it’s a good day, there’s a bad day right away,” said Ryan Detrick, senior technical analyst with Schaeffer’s Investment Research.

The Standard & Poor’s 500 index and Nasdaq also had big gains Tuesday but only moved a fraction of a point a day later. The S&P inched up 0.24 to close at 1,277.30. The Nasdaq fell 0.36 to 2,648.36.

“It’s healthy to see that after a big rally,” said Randy Warren, chief investment officer for Warren Financial Service. “People need to sit back and think about it.”

Retailing industry stocks rose 0.8 percent as a group after post-Christmas sales came in 5.3 percent better than a year ago. Bed Bath & Beyond Inc. rose 1.8 percent, and Ross Stores Inc., which sells discounted clothes, rose 0.7 percent.

Big-box stores fell, though. Analysts have been concerned that some stores raised holiday sales with deep discounts that will hurt profits. Wal-Mart Stores Inc. fell 1.1 percent, making it the second-biggest decliner among the Dow’s 30 stocks. Target Corp. fell 2.2 percent and Kohl’s Corp. fell 1.4 percent.

Automakers delivered a strong end to 2011, helped carmaker stocks. Analysts had been expecting December to be a strong sales month for cars on the theory that more confidence in the economy would unlock pent-up demand. Ford Motor Co. rose 1.5 percent and General Motors Co. rose 0.5 percent after those two companies and Chrysler reported strong increases in December and full-year sales low fee payday loans.

Visa Inc. fell 1.8 percent and MasterCard Inc. fell 3.3 percent. Janney analysts downgraded both to “neutral” from “buy” and predicted that Americans will keep cutting their personal debt.

The biggest winner in the S&P 500 was Netflix Inc., up 11.4 percent. The company, which delivers movies and TV shows online and by mail, said customers had streamed more than 2 billion hours of video in the fourth quarter.

The yield on 10-year Treasury notes briefly popped above 2 percent, then fell to to 1.98 percent in the afternoon. Yields have been falling over the past year as investors have loaded up on low-risk investments. A rise in yields suggests that investors are more willing to take risks by parking money elsewhere in exchange for higher rewards.

The price of gold rose $12.20 to $1,612.70 per ounce. Oil rose 26 cents to $103.20.

European markets declined, and the euro fell back below $1.30, to $1.2945, within a penny of its lowest level in a year. Another increase in Italy’s borrowing costs renewed worries about Europe’s efforts to restore confidence in its debt-hobbled governments.

In other corporate news:

_ Acme Packet Inc., which makes phone equipment, plunged 19 percent after saying its quarterly profit and revenue would be well below analyst expectations.

_ Yahoo Inc. fell 3.1 percent after the company named Scott Thompson, president of eBay Inc.’s PayPal division, as CEO _ its fourth in five years. Yahoo has been without a permanent CEO since firing Carol Bartz in September. EBay fell 3.8 percent.

_ Fallen photography pioneer Eastman Kodak Co. fell 18 cents to 47 cents after The Wall Street Journal, quoting people familiar with the matter, reported it is preparing a bankruptcy filing in case its efforts to sell some of its patents fail. On Tuesday, Kodak said its stock could be removed from the New York Stock Exchange if it doesn’t rise above $1 in the next six months.

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Corn traders are bullish for a fifth consecutive week on speculation that dry weather in South America is damaging crops, boosting demand for U.S. supplies at a time when stockpiles are predicted to shrink to a 16-year low.

Nineteen of 25 traders surveyed by Bloomberg expect corn to advance next week. Lower-than-average humidity and dry soil will curb crop development in Argentina and southern Brazil through at least Jan. 7, according to T-Storm Weather LLC, a forecaster in Chicago. Argentina is the world

+%3Cp%3E+Cell+phone+bans%2C+such+as+those+recently+recommended+by+the+National+Transportation+Safety+Board%2C+have+so+far+proven+useless+when+it+comes+to+actually+reducing+car+crashes%2C+according+to+the+Insurance+Institute+for+Highway+Safety.%3C%2Fp%3E%3Cp%3EThe+Insurance+Institute+is+a+private+group+financed+by+auto+insurers.+The+National+Transportation+Safety+Board+recently+recommended+that+states+adopt+strict+rules+banning+all+non-driving-related+use+of+hand-held+devices+such+as+cell+phones+–+even+hands-free+–+while+driving.%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3C%2Fp%3E%3C%2Fp%3E%3Cp%3EMany+states+already+have+bans+on+hand-held+cell+phone+use+and+on+texting+while+driving.+The+Insurance+Institute+has+studied+crash+rates+before+and+after+bans+were+enacted+in+various+states+and+also+compared+them+to+crash+rates+in+nearby+states+with+no+such+bans.%3C%2Fp%3E%3Cp%3EWhile+the+bans+have+resulted+in+actual+reductions+in+phone+use%2C+they+have+not+resulted+in+any+reduction+in+crash+rates%2C+according+to+the+Institute.%3C%2Fp%3E%3Cp%3EThe+Institute+found+similar+results+from+bans+on+text+messaging+while+driving.+In+fact%2C+in+a+strange+twist%2C+texting+bans+actually+resulted+in+more+crashes+in+several+states%2C+according+to+an+IIHS+study.%3C%2Fp%3E%3Cp%3EThe+lesson%2C+Insurance+Institute+spokesman+Russ+Rader+said%2C+may+be+that+cell+phones+aren%27t+really+the+problem%2C+drivers+are.%3C%2Fp%3EGallery%3A+Safest+cars+from+the+Insurance+Institute%3Cp%3E%26quot%3BPart+of+it+is+that+distracted+driving+is+much+bigger+than+just+phones%2C%26quot%3B+he+said+%26quot%3Bso+focusing+on+phones+doesn%27t+deal+with+the+full+spectrum+of+things+that+distract.%26quot%3B%3C%2Fp%3E%3Cp%3EFor+its+part%2C+the+NTSB+has+cited+various+studies+showing+a+connection+between+cell+phone+use+and+an+increased+likelihood+of+crashing.+An+NHTSA+study+indicated+that+distracted+driving+caused+about+3%2C000+crash+deaths+last+year%2C+although+it%27s+not+clear+how+many+of+those+crashes+were+related+to+hand-held+devices+as+opposed+to+other+distractions.%3C%2Fp%3E%3Cp%3E%26quot%3BWhat+we+know+is+that+the+best+course+of+action+is+a+three+pronged+approach+–+strong+laws%2C+strong+education+and+strong+enforcement%2C%26quot%3B+NTSB+spokeswoman+Kelly+Nantel+said+in+an+email.%3C%2Fp%3E%3Cp%3EAutomakers%2C+including+Ford+%28%2C+Fortune+500%29%2C+General+Motors+%28%2C+Fortune+500%29%2C+Toyota+%28%29+and+Hyundai+%28%29+have+invested+heavily+in+creating+increasingly+sophisticated+hands-free+phone+systems+for+cars+%3Ca+href%3D%22http%3A%2F%2Fpay-day-loans-4all.com%22%3Efaxless+pay+day+loans%3C%2Fa%3E%3C%21–+.+–%3E.+Most+of+those+systems+would+be+banned+under+the+NTSB%27s+proposal.+%28An+exception+would+be+GM%27s+OnStar+which+allows+users+to+make+calls+using+a+telephone+built+into+the+car+itself.+The+NTSB+proposal+would+specifically+allow+calls+on+that+sort+of+system+since+it+does+not+involve+a+handheld+phone.%29%3C%2Fp%3E%3Cp%3EFord+spokeswoman+Christin+Baker+objected+to+the+NTSB+proposal+citing+research+that+tracked+real-world+drivers.+The+research+showed+that+talking+on+a+phone+resulted+in+dangerous+incidents+only+when+drivers+took+their+eyes+off+the+road+and+their+hands+off+the+steering+wheel.+Voice-activated+systems+like+Ford%27s+Sync+would+prevent+that%2C+she+said.%3C%2Fp%3E%3Cp%3EExperts+have+said+the+NTSB%27s+proposal+is+unlikely+to+become+law+in+many%2C+if+any%2C+states+due+to+strong+resistance+from+drivers+who+want+to+stay+in+communication+while+driving.%3C%2Fp%3E%3Cp%3ENew+technologies+that+help+alert+drivers+to+hazards+on+the+road+would+probably+do+more+to+actually+reduce+distracted+driving+crashes%2C+the+Insurance+Institute%27s+Rader+said.%3C%2Fp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E+%3C%2Fp%3E%3Cp%3ESuch+technologies+include+forward+collision+warning+systems+that+alert+drivers+to+stopped+or+slow-moving+cars+or+pedestrians+ahead+of+them+and+lane+keeping+assistance+systems+that+warn+when+a+vehicle+is+drifting+out+of+its+lane.%3C%2Fp%3E%3Cp%3EBoth+the+Insurance+Institute+and+the+U.S.+Department+of+Transportation+are+looking+at+ways+to+incorporate+safety+systems+like+these+in+their+assessments+of+car+safety.+As+of+now%2C+such+assessments+rely+almost+entirely+on+crash+tests.%3C%2Fp%3E%3Cp%3EThere+is+the+danger+that+drivers+might+over-rely+on+these+systems%2C+said+Rader%2C+canceling+out+their+benefits+by+just+paying+even+less+attention+to+the+task+of+driving.%3C%2Fp%3E%3Cp%3E%26quot%3BThat+is+the+thing+researchers+are+going+to+be+watching%2C%26quot%3B+said+Rader.+%26quot%3BHow+are+drivers+going+to+respond+to+these+systems%3F%26quot%3B%26nbsp%3B+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fmoney.cnn.com%2F2011%2F12%2F15%2Fautos%2Fiihs_cell_phone_bans%2Findex.htm%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+