US shoppers in VAT confusion

Shoppers are facing the last day of the lower rate of VAT, although many retailers have said they will not increase prices on 1 January. VAT is set to return to 17.5 % in the new year after being reduced to 15 % on 1 December 2008. The government cut VAT in an attempt to boost spending in the recession. But several retailers have said that they will delay passing on the higher rate, while others say they will absorb the cost of the increase. The Centre for Economics and Business Research ( CEBR) estimates that the 13- month tax cut helped boost consumer spending by £6.8 bn, although the British Retail Consortium (BRC) says it has had a "very limited effect". However, the CEBR warned that the first few months of 2010 could be tough for retailers, as spending may be affected by the increase in VAT and rising inflation. Fake freeze? Supermarket giants Tesco, Sainsbury's and Asda have all said that they will delay passing on the increased rate on thousands of products. But Tesco has been accused of raising prices ahead of the tax rise. A report in the Daily Mail claims that Tesco, Boots and Morrisons have all increased the prices of certain items in recent weeks. Tesco told the newspaper its price changes had " no link whatsoever" to the VAT increase, while Boots said it benchmarked its prices against other retailers. Morrisons, which has not claimed that it would freeze VAT, said prices vary throughout the year "reflecting costs and promotional changes". Absorbing costs Meanwhile, Argos and John Lewis both say they will not raise prices until the end of January. Arcadia Group, which owns Topshop, Dorothy Perkins and BHS, has said it will absorb the cost of the increase in all of its stores. But Marks and Spencer will raise prices on all general merchandise from 1 January and on food items on which the tax is paid from 11 January. Shoppers will not notice a difference on price tags, though, as the retailer never displayed the VAT reduction on tags, instead giving customers a 2.5 % discount at the till.

US votes for china steel

A US trade commission has agreed plans to impose tariffs on imports of Chinese-made steel pipes. The US's International Trade Commission voted unanimously in favour of the tariffs, designed to offset Chinese government subsidies. Duties ranging between 10 % and 15 % are now set to be imposed. The move is the latest in a string of recent trade disputes between China and the US, who accuse China of using unfair subsidies and price practices. In November, the US imposed a 35 % import duty on Chinese tyres, arguing that large numbers entering the US market was having a disruptive effect. The latest decision clears the way for the Commerce Department to impose the tariffs on steel piping as originally outlined in November. Steel piping is big business in the US, which imported $2.74 bn of steel pipe from China last year. The pipes are used in oil wells, and have seen increased demand on the back of rising oil prices.

Apple win ipod hearing

A US appeals court has ruled in favour of Apple in a lawsuit claiming that the iPod was could be responsible for hearing loss. The judge upheld a 2008 ruling, saying "the plaintiffs simply do not plead facts showing that hearing loss from iPod use is actual or imminent". He also noted that Apple issues a warning with each of the music players. The two claimants said the iPod was defective because users can listen to it at the unsafe level of 115 decibels. Apple has sold more than 220 million iPods since its launch in 2001. "The plaintiffs do not allege the iPods failed to do anything they were designed to do nor do they allege that they, or any others, have suffered or are substantially certain to suffer inevitable hearing loss or other injury from iPod use," Senior Judge David Thompson wrote in a statement. He added: "At most, the plaintiffs plead a potential risk of hearing loss not to themselves, but to other unidentified iPod users."

Russian firm listed in Hongkong

The Russian aluminium firm Rusal plans to raise as much as $2.6 bn from its public listing in Hong Kong. It is the first Russian company to be listed on the exchange. Trading is expected to begin on 27 January. Rusal will sell 1.6 bn shares at a price between 9. 1 Hong Kong dollars ($1.20 ; 73 pence) and 12.5 Hong Kong dollars. The firm is banned from selling shares to retail investors. Any wealthy individuals who want to invest must buy at least 1 m Hong Kong dollars' worth. The sale has been delayed twice because of concerns about the company's $14.9 bn debt. "Given the high debt of Rusal and oversupply in the aluminium sector, it is not attractive to investors based on fundamental analysis," said Steven Leung, director of institutional sales at UOB-Kay Hian. Rusal is controlled by the billionaire Oleg Deripaska. The company said in a statement that it intended to use the money raised from the listing to pay down its debt.

Copper price rise high

The price of copper has reached a 16- month high with strike action looming at two copper mines in Chile. Copper on the London Metal Exchange traded above $7 ,300 a tonne on Wednesday - its highest level since September 2008. Investors expect demand for the metal to be strong in the new year. There are also concerns that strike action at the two mines owned by Chile's Codelco - the world's largest copper producer - could affect supply. Expectations of higher demand will add to the long rally in copper prices seen in 2009 , analysts said. Copper is now on course for an annual rise of about 140 % - its biggest in more than 30 years. Strike fears Strike action at the giant Chuquicamata and Mina Sur mines in Chile is due to begin on 4 January, though analysts are not expecting prolonged disruption. Workers are calling for pay increases, prompted by the rise in global copper prices. The Chuquicamata mine alone produces around 4 % of the world's copper, according to RBC Capital Markets, and is expected to produce 565 , 000 tonnes of copper this year.