Morning business round-up: UK inflation falls to 3.4%

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What made the business news in Asia and Europe this morning? Here's our daily business round-up:

Inflation in the UK continued to fall in February, thanks largely to lower gas and electricity bills.

Consumer Prices Index (CPI) inflation fell to 3.4% in February, down from 3.6% in January, according to the Office for National Statistics (ONS).

Still in the UK, a £20bn government scheme to try to boost bank lending to small and medium-sized enterprises (SMEs) has been launched by the chancellor.

Under the National Loan Guarantee Scheme (NLGS), such businesses will be able to access loans with interest rates one percentage point lower than those available outside the initiative.

The country's banks and government have been criticised for not doing enough to ensure small businesses can borrow money to expand in the wake of the credit crunch.

In Hong Kong, the Hong Kong's Executive Council has approved at its international airport.

The runway, which is expected to cost $17bn, will be Hong Kong's most expensive project.

The airport is expected to operate at full capacity by 2020.

There have been fears of air traffic congestion, though the expansion plans have also faced opposition due to environmental concerns.

Meanwhile, travel in China will be more expensive as China has raised the price of petrol by about 6% and diesel about 7% for the second time in 2012, as it struggles with the rising cost of crude oil.

Global oil prices have been high because of tensions with key supplier Iran.

The move is aimed at ensuring domestic fuel supplies and to help local refiners cut heavy losses.

Analysts said this was a sign the government is less concerned about inflation.

Media caption,

Biz Heads

In Germany, the country's biggest retailer Metro reported a sharp fall in profits, as European shoppers cut back spending in the midst of the economic crisis.

Net profits fell 26% to 631m euros ($833m) in 2011. No improvement was expected this year, Metro said.

Metro had earlier hoped to sell its department store chain, Galeria-Kaufhof, but adverse market conditions made it suspend that plan in January.

It said it expects to lose $200m on its movie John Carter, making it one of the biggest flops in cinema history.

The film, about a military captain transported to Mars, could result in an $80m-120m loss for Disney's movie business during the current quarter.

Disney shares fell 1% in after hours trading after the announcement.

The firm is still likely to make a substantial quarterly profit, though, thanks to its TV businesses.

The latest edition of the BBC's Business Daily programme looks at Germany.

Despite the eurozone crisis it is still doing well, with unemployment falling to a 20 year low a few months ago.

The BBC's correspondent in Berlin, Stephen Evans, goes on a journey across Europe's biggest economy in search of the secret of German success.

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