Corn prices have risen to new highs as the US Department of Agriculture predicts that supplies will fall because of poor weather.

Corn hit the record price of $6.672 a bushel this week on the Chicago Board of Trade after the forecast, as crops have been hit hard by flooding and wet weather in the US.

Also adding to the problem, demand for corn for use in both food and fuel has been steadily increasing worldwide, and as demand for corn to feed animals and make biofuels increases it is likely to push up prices further.

For the second month in a row sales on UK High Streets have fallen, according to figures from the British Retail Consortium (BRC). Like-for-like sales fell by 1.5% in April compared to the same month in 2007. Total sales, which include shops that were not running last year rose by 1.0% last month.

The BRC's figures only take into account the value of sales from a selection of retailers. It is the first time that the BRC's figures had fallen for two consecutive months in a row since the first quarter of 2005.

Barclays capital has launched three indices for tracking foreign exchange unpredictability. They hope the products will provide both varied long-term investment and protection against market downturns in the short term.

Each of the indices have been designed to be used in a variety of structures and investment purposes, and it will be possible to generate tracker funds for investors as well as underlying for structured products.

As most analysts predicted earlier on in the week The Bank of England today lowered the interest rate from 5.25% to 5% in an attempt to kick start the economy amidst the global credit crunch. It’s the third time the Bank of England has cut in interest rates since early December.

Recent problems in the money markets coupled with declining house prices have attributed to the decision. Business groups welcomed the decision and called for further reductions to shore up growth.

The International Monetary Fund (IMF) plans to sell some of its gold assets to shore up the troubled financial market. The IMF hopes to raise in the region of $6bn (£3bn) from the sale, approximately 12.97 million ounces which equates to around 12% of its gold holdings.
Gold’s price has been steadily rising over the past few months as traders look for havens to protect their money from the unstable financial markets.
The IMF can only sell the gold if it gets approval from the US Congress and many of the 185 countries that are members of the organization.

HSBC announced a loss of $17.2bn on those investements which are linked to the credit crisis, this was much higher than expected. HSBC overall annual profits still went up by 10%. All five of the big UK banks have suffered loss through the credit crisis, although HSBC seems to be the hardest hit.

HSBC Chairman Stephen Green said he thought the years ahead looks uncertain. HSBC did see strong growth in the Asian businesses.

The decision on interest rates is not an easy one to make for the US Federal Reserve. Production prices in the US have risen steeply to a rate last seen back in October 1981.

The indicator on producer prices rising is that the retail market will also follow. The simple fact is that if inflation prices rises much more there will be no chance of cutting interest rates.

The limitation which could be imposed on the Federal Reserve is clear.