U.K. Warns Iran After Tehran Embassy Attack

The U.K. will evacuate some of its diplomatic staff from Iran after its embassy in Tehran was stormed by protesters yesterday, chanting “death to the U.K.” and burning its flag.

The incursion, which came a week after the U.S. and Britain imposed additional sanctions due to Iran’s nuclear program, lasted less than two hours before police moved in, according to the Associated Press. Detained protesters will be brought before judiciary authorities, the state-run Mehr news said, citing Tehran’s police chief, Hossein Sajedinia.

The U.S., which says Iran provides weapons, training and money to Hamas and Hezbollah, among other Middle East militant groups, is leading an international effort to tighten an economic noose on the country. Iran, meantime, is standing firm with President Mahmoud Ahmadinejad this month saying he won’t withdraw “an iota” from the atomic program.

“The Iranian government must recognize that there will be serious consequences for failing to protect our staff,” U.K. Prime Minster David Cameron said in a statement.

..............................................................................
U.K. Strike Threatens Closure of Airports, Schools

Members of 30 U.K. public-sector unions walked out in a dispute over pensions with Prime Minister David Cameron’s government that’s set to close schools and disrupt airports and hospitals.

As many as 2 million government staff, including immigration officials, nurses and civil servants, are expected to take part in today’s one-day strike, the Trades Union Congress said in a statement. London’s Heathrow airport, Europe’s busiest hub, and Gatwick, the capital’s second airport, warned passengers they will face delays and Education Secretary Michael Gove said more than 90 percent of schools will be shut.

Unions are striking to protest plans to make government employees retire later and contribute more to their pensions. Ministers say the move, part of Cameron’s program of spending cuts to narrow the budget deficit, is fair because workers who contribute to public-sector pensions get benefits no longer available in the private sector.
...........................................................................
German Retail Sales Increase for Second Month

German retail sales rose more than economists forecast in October as shoppers maintained their willingness to spend ahead of the year-end holiday season.

Sales, adjusted for inflation and seasonal swings, increased 0.7 percent from September, when they advanced 0.3 percent, the Federal Statistics Office in Wiesbaden said today. That’s the biggest increase since June. Economists forecast a gain of 0.1 percent, the median of 19 estimates in a Bloomberg News survey showed. Sales dropped 0.4 percent from a year ago.

German shoppers plan to increase spending over the holiday season by 4.3 percent, according to a study by Deloitte LLP, helping Europe’s largest economy weather the impact of the region’s debt crisis. Unemployment held near the lowest in more than two years in October and business confidence unexpectedly increased this month.

“That’s a good start to the fourth quarter,” said Carsten Brzeski, an economist at ING Group in Brussels. “Looking ahead, consumption should at least remain stable. It looks as if consumers have found their own therapy to cope with the debt crisis trauma: comfort shopping under the Christmas tree?”

The euro was little changed after the report, trading at $1.3293 at 8:12 a.m. in Frankfurt, down 0.2 percent on the day.

..........................................................................
German Unemployment Drops as Companies Defy Crisis

German unemployment dropped more than economists forecast in November, as companies’ resilience to the euro area’s debt woes showed no sign of cracking.

The number of people out of work fell a seasonally adjusted 20,000 to 2.91 million, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decline of 5,000, the median of 33 estimates in a Bloomberg News survey showed. The adjusted jobless rate dropped to 6.9 percent.

German companies are holding on to staff even as Europe’s worsening fiscal crisis clouds growth prospects. Business confidence rose for the first time in five months in November, the Ifo economic institute said last week, while consumer confidence will increase for a third month in December, GfK SE (GFK) said Nov. 28.

“Demand for labor remains fairly high because order books are still full and companies still have a positive assessment of their business situation,” said Joerg Lueschow, an economist at WestLB in Dusseldorf, Germany. “I’m optimistic that we won’t see a sharp deterioration in the labor market going into 2012.”

Sports-car maker Porsche AG (PAH3) plans to add as many as 1,000 jobs a year through 2018 to sustain an expansion in models and sales, personnel chief Thomas Edig said on Nov. 25. Airbus SAS, whose German production sites include Hamburg, plans to hire a total of 4,000 workers next year, Boersen-Zeitung cited Chief Executive Officer Thomas Enders as saying Nov. 24.
...........................................................................

India’s Economy Grows Slowest Since 2009 as Fastest BRIC Inflation Bites

India’s economy grew last quarter at the slowest pace in more than two years after the nation’s central bank raised interest rates by a record to tame the fastest inflation among so-called BRIC nations.

Gross domestic product rose 6.9 percent in the three months through September, the Central Statistical Office said in a statement in New Delhi today. That’s the weakest expansion since the second quarter of 2009, and matches the median of 6.9 percent in a Bloomberg News survey of 24 economists.

Prime Minister Manmohan Singh’s efforts to stimulate growth are being hamstrung by corruption scandals that have stalled legislation for a year, and political outcry against foreign investment in retail. The Reserve Bank of India has also been constrained in supporting the economy as it struggles with inflation that’s almost twice the rate in China and higher than in Brazil and Russia.

“High interest rates, uncertainty about reforms, allegations of corruption and recessionary global conditions are casting a deep shadow over India’s growth story,” said Rohini Malkani, a Mumbai-based economist at Citigroup Inc. “What is worrying is that growth prospects do not seem sunny for the next year either.”

Citigroup this week cut its estimate for the Indian economy’s expansion to 7.1 percent for the year ending March 31 from 7.6 percent earlier.

Rupee Drops
The Indian rupee weakened 0.3 percent to 52.16 per U.S. dollar at 11:40 a.m. in Mumbai, while the BSE India Sensitive Index (SENSEX) declined 0.3 percent. The yield on the 8.79 percent note due November 2021 was at 8.77 percent, unchanged from before the data was published.