UK warned on debt ‘credibility’

5 December 2012 Last updated at 14:28 ET

The UK’s failure to meet a key public debt target “weakens the credibility” of its top AAA credit rating, the Fitch ratings agency has said.

Debt will now not fall as a proportion of the country’s output until 2016-17, a year later than Chancellor George Osborne had targeted.

Fitch said that the Autumn Statement confirmed the scale of the challenge facing the UK.

In March, it said the UK’s AAA rating was under threat.

A cut to the credit rating would mean that the country is perceived as more risky to lend to, thereby raising the cost of borrowing from international investors.

The Office for Budget Responsibility, the independent body that makes economic forecasts for the government, announced that the UK will miss its debt target and the economy will contract by 0.1% this year – a big revision from the time of the Budget in March, when it said that the economy would grow 0.8% this year.

Growth forecasts for the next five years were also cut.

“We forecast gross general government debt to peak at 97% in 2015-16, approaching the upper limit of the level consistent with the UK retaining its AAA status,” Fitch said.

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“The government has chosen not to chase the supplementary target by deploying additional consolidation measures over the next two years. In our view, missing the target weakens the credibility of the UK’s fiscal framework, which is one of the factors supporting the [AAA] rating.”

It warned in March that it could downgrade the UK in the next few years if the government does not contain the level of public debt.

Fitch said it would formally review the UK’s rating after the next Budget in March 2013.

In February, rival agency Moody’s also warned that the UK’s credit rating may be cut in future, potentially increasing borrowing costs.

Confusion on borrowing

On borrowing figures, the chancellor said that debt would not begin to fall as a proportion of the country’s output until 2016-17, which is a year later than the government’s target.

Before the statement, many analysts had predicted that the budget deficit, which is the amount the government is having to borrow in the current year, would be higher than it was last year.

However, it is now forecast to fall from £121bn in 2011-12 to £108bn in 2012-13.

But there was some confusion about how that had been achieved, with shadow chancellor Ed Balls complaining about the full figures not being in the Mr Osborne’s statement.

BBC economics editor Stephanie Flanders said that the deficit figure had fallen because the government had decided to use the proceeds from the sale of licences to run 4G mobile phone services to reduce this year’s borrowing.

Without that, she said, the deficit would have risen “maybe by a couple of billion pounds”.

There was also a reduction in the deficit of £11.5bn in the current year as a result of the Asset Purchase Facility.

As a result of the Bank of England’s quantitative easing programme, the central bank currently owns a lot of the government’s debt.

If anybody else had lent money to the government it would have had to pay interest on those loans.

The government has now decided it should not be paying interest to the Bank of England, and the benefit of that has reduced the deficit and will continue to do so for the next four years.

BBC News – Business

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Death toll from Philippine typhoon nears 300

NEW BATAAN, Philippines (AP) — Stunned parents searching for missing children examined a row of mud-stained bodies covered with banana leaves while survivors dried their soaked belongings on roadsides Wednesday, a day after a powerful typhoon killed nearly 300 people in the southern Philippines.

Officials fear more bodies may be found as rescuers reach hard-hit areas that were isolated by landslides, floods and downed communications.

At least 151 people died in the worst-hit province of Compostela Valley when Typhoon Bopha lashed the region Tuesday, including 78 villagers and soldiers who perished in a flash flood that swamped two emergency shelters and a military camp, provincial spokeswoman Fe Maestre said.

Disaster-response agencies reported 284 dead in the region and 14 fatalities elsewhere from the typhoon, one of the strongest to hit the country this year.

About 80 people survived the deluge in New Bataan with injuries, and Interior Secretary Mar Roxas, who visited the town, said 319 others remained missing.

“These were whole families among the registered missing,” Roxas told the ABS-CBN TV network. “Entire families may have been washed away.”

The farming town of 45,000 people was a muddy wasteland of collapsed houses and coconut and banana trees felled by Bopha’s ferocious winds.

Bodies of victims were laid on the ground for viewing by people searching for missing relatives. Some were badly mangled after being dragged by raging flood waters over rocks and other debris. A man sprayed insecticide on the remains to keep away swarms of flies.

A father wept when he found the body of his child after lifting a plastic cover. A mother, meanwhile, went away in tears, unable to find her missing children. “I have three children,” she said repeatedly, flashing three fingers before a TV cameraman.

Two men carried the mud-caked body of an unidentified girl that was covered with coconut leaves on a makeshift stretcher made from a blanket and wooden poles.

Dionisia Requinto, 43, felt lucky to have survived with her husband and their eight children after swirling flood waters surrounded their home. She said they escaped and made their way up a hill to safety, bracing themselves against boulders and fallen trees as they climbed.

“The water rose so fast,” she told AP. “It was horrible. I thought it was going to be our end.”

In nearby Davao Oriental, the coastal province first struck by the typhoon as it blew from the Pacific Ocean, at least 115 people perished, mostly in three towns that were so battered that it was hard to find any buildings with roofs remaining, provincial officer Freddie Bendulo and other officials said.

“We had a problem where to take the evacuees. All the evacuation centers have lost their roofs,” Davao Oriental Gov. Corazon Malanyaon said.

The International Federation of Red Cross and Red Crescent Societies issued an urgent appeal for $ 4.8 million to help people directly affected by the typhoon.

The sun was shining brightly for most of the day Wednesday, prompting residents to lay their soaked clothes, books and other belongings out on roadsides to dry and revealing the extent of the damage to farmland. Thousands of banana trees in one Compostela Valley plantation were toppled by the wind, the young bananas still wrapped in blue plastic covers.

But as night fell, however, rain started pouring again over New Bataan, triggering panic among some residents who feared a repeat of the previous day’s flash floods. Some carried whatever belongings they could as they hurried to nearby towns or higher ground.

After slamming into Davao Oriental and Compostela Valley, Bopha roared quickly across the southern Mindanao and central regions, knocking out power in two entire provinces, triggering landslides and leaving houses and plantations damaged. More than 170,000 fled to evacuation centers.

As of Wednesday evening, the typhoon was over the South China Sea west of Palawan province. It was blowing northwestward and could be headed to Vietnam or southern China, according to government forecasters.

The deaths came despite efforts by President Benigno Aquino III’s government to force residents out of high-risk communities as the typhoon approached.

Some 20 typhoons and storms lash the northern and central Philippines each year, but they rarely hit the vast southern Mindanao region where sprawling export banana plantations have been planted over the decades because it seldom experiences strong winds that could blow down the trees.

A rare storm in the south last December killed more than 1,200 people and left many more homeless.

The United States extended its condolences and offered to help its Asian ally deal with the typhoon’s devastation. It praised government efforts to minimize the deaths and damage.

___

Associated Press writers Jim Gomez, Teresa Cerojano and Oliver Teves in Manila contributed to this report.

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Microsoft #DroidRage Tweet Shows How Malware Has Moved Past Windows

“Do you have an Android malware horror story?” Microsoft asks through its @windowsphone Twitter account, in what may be one of the most ironic tweets of the year.

After all, it wasn’t that long ago that “virus” and “worm” stories made headlines on a regular basis, all of them about “computer viruses” which were really Windows viruses. Just a few years ago, Apple advertised the fact that a Mac “Doesn’t get PC viruses” as a reason to buy one.

But this year, 600,000 Macs were infected by the Flashback trojan, an epidemic which exceeded the scale of history’s single largest Windows infection. And now ​Microsoft​ is implying that its phones don’t get malware, as a way to advertise them. How did things get to be this way, and what will malware and virus authors do next?

​When virii attack

For years, Microsoft’s DOS and Windows operating systems were the biggest targets for virus and malware authors simply because they were the least secure. Today’s PC security best practices had yet to be built into them, and trying to bolt features on to ancient programming code was a half-baked solution at best. HugeWindows malware epidemics spread as the malware programs were able to install themselves without explicit permission and operate without user intervention.

​Network effects

One reason Microsoft Windows dominated the computing world for years and years was simply because it was dominant. More people using Windows meant more profits for Windows app developers, which meant more games and apps for Windows, which meant more people buying Windows PCs so they could use Windows games and apps.

Like with apps, malware is a business that makes money for the people who write it. And while it was theoretically possible to infect a computer running a more secure operating system, like OS X (used on Macs) or Ubuntu (powered by Linux), it was considered impossible to get it to spread far enough to be profitable. Whereas on Windows it was (and still is) possible to infect vast numbers of PCs, even chaining them into zombified “botnets” which act as supercomputers-for-hire.

​How the mighty have fallen?

OS X’s more secure design makes it extremely hard to infect with malware — normally. The Flashback trojan sneaked in this year using the Java web browser plugin, which is bundled with the Mac’s Safari web browser and was poorly maintained.

Plugins like Java and Flash open up new ways to infect a computer, which was one reason why Apple stopped including the Flash plugin (already absent on its iPhone and iPad) by default. Apple created a fix for the problem, but not before over half a million Macs were infected.

​What about on smartphones?

Unlike Apple and Microsoft’s app stores, the Google Play store allows anyone to submit anything with no review. It’s up to Android smartphone and tablet users to look at the “permissions” each game or app requests, as well as the reputation of their developers, and decide whether or not to install them.

While some consider this approach more “trustworthy” and respectful of users, it’s also helped lead to a comparatively enormous number of malware infections on Android, including “The Mother of All Android Malware,” which completely took over tens of thousands of phones last year.

​Are you #DroidRage-ing yet?

Microsoft’s tweet says “we may have a get-well present” for people who send it their best or worst stories of Android malware. Even if all the apps in the Windows Store are virus-free, however, there are still far fewer of them than there are for Android.

Jared Spurbeck is an open-source software enthusiast, who uses an Android phone and an Ubuntu laptop PC. He has been writing about technology and electronics since 2008.
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Disney loses appeal of “Who Wants to Be a Millionaire?” ruling

LOS ANGELES (Reuters) – The Walt Disney Co. was ordered to pay the British creator of the television game show “Who Wants to be a Millionaire?” $ 319 million after a Los Angeles court rejected the company’s request for a new trial.

Britain’s Celador International, which created the quiz show, sued Disney in 2004 alleging that the company hid some of the show’s U.S. profits from Celador.

A three-judge panel of the 9th U.S. Circuit Court of Appeals in Pasadena ruled on Monday that the lower court’s judgment was neither excessive nor based on speculation of profits owed.

A 2010 jury trial found that Disney and its domestic syndication company, Buena Vista Television, owed Celador $ 269.2 million and a federal judge added $ 50 million in interest.

“We are extremely disappointed with the decision, as ABC and Buena Vista Television continue to believe that they fully adhered to the ‘Millionaire’ agreement,” Walt Disney said in a statement on Tuesday.

Disney did not comment on further possible legal action.

“Who Wants to Be a Millionaire?” aired on Disney-owned broadcaster ABC from 1999 to 2002 and was credited with ushering in a new era of reality programming on U.S. television.

“I am pleased that justice has been done,” Celador Chairman Paul Smith said in a statement.

The game show, which started in Britain and later became an international hit, quizzes contestants on trivia for the top prize of $ 1 million. The show is now in U.S. syndication.

(Reporting by Eric Kelsey, editing by Jill Serjeant)

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Flu Season Begins Earliest in a Decade

Flu season 2012-13 has begun in the United States, according to Dr. Thomas Friedan, director of the Centers for Disease Control and Prevention . The good news: The vaccine available for the season matches up well with the flu already being reported. This information, coupled with the fact that there are ample flu shots to go around, bodes well for those who have been immunized and for those wanting to be immunized against this season’s most likely flu virus culprits.

Early Flu Season 2012

Friedan participated in a telebriefing on Monday, explaining that reports from physicians in several states points to an increase of patients seeking treatment for flu-like symptoms and that most of those cases will likely turn out to be influenza. Unlike the flu season of 2011-12, which had a late start, this season has begun the earliest since 2003.

Both Friedan and Dr. Melinda Wharton, acting director of the National Center for Immunization and Respiratory Diseases, emphasized that peak flu season is generally seen in the months of January and February, allowing plenty of time to get the flu shot now and develop immunity to the strains protected by the immunization.

A “Flu View” map provided by the CDC, updated weekly with the most current information, shows that five states are already experiencing high levels of flu activity: Texas, Louisiana, Mississippi, Alabama and Tennessee, with Georgia and and Missouri each reporting moderate flu activity.

National Influenza Vaccination Week Dec. 2-8

In an effort to encourage people to take the flu vaccine, the CDC has embarked on a concentrated effort to educate the public on both influenza and its prevention. Although some people may think it’s too late to take the flu shot, the CDC and the U.S. Surgeon General’s office want you to know that getting a flu shot now may save you and/or your family from the flu and its possible complications, including hospitalization and even death. An average of 24,000 people in the United States dies each year from flu complications.

People who are at higher risk for developing complications from the flu include children age 5 years and younger — and especially children under 2 years of age and those under 6 months of age. Also included in the high risk categories for flu complications are pregnant women, people with chronic conditions such as lung problems, diabetes and heart disease. People age 65 and older, baby boomers and seniors, are also more likely to develop serious complications from the flu.

Where You Can Find the Flu Shot

An interactive map allows you to find the places nearby that are offering flu vaccinations and answers questions you may have about the vaccine and the various administration options.

Bottom Line

Approximately 112 million people have already taken the flu shot, according to estimates by the National Center for Immunization and Respiratory Diseases. The immunization is the single best way to protect you and your family from this season’s influenza. Even if you are not concerned about yourself becoming ill, give consideration to those about whom you care and protect them from the flu, and worse.

Smack dab in the middle of the baby boomer generation, L.L. Woodard is a proud resident of “The Red Man” state. With what he hopes is an everyman’s view of life’s concerns both in his state and throughout the nation, Woodard presents facts and opinions based on common-sense solutions.

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When Mobile Market Research Is Talkin’ Loud and Saying Nothin’

According to a report released today from Kantar Worldpanel ComTech (apparently a division of UniWeb Digicyber Softlutions), Apple’s (AAPL) iPhone was the best-selling smartphone in the U.S. for the 12-week period ended Oct. 28th.

Kantar’s data shows that iOS smartphones (remember, Apple sells the iPhone 5, but also the 4S and 4 models at a discount) command 48.1 percent of the market. That’s up 25.7 percent from the same period last year. Android phones aren’t far behind, at 46.7 percent of the market, down 16.6 percent from last year’s numbers.

Meanwhile, Android continues to rock out internationally. According to IDC, the OS has 75 percent of the global market, compared with Apple’s much smaller 14.9 percent share.

Not that market share has anything to do with profits. Apple may not sell the most handsets worldwide, but it does take in the bulk of the industry’s profits—to the tune of 77 percent in the mobile industry in the second quarter of 2012, according to Raymond James (RJF) analyst Tavis McCourt.

But this doesn’t seem to be having a salutary effect on Apple’s stock price. Apple’s stock reached a high on Sept. 19 at 702.10 and, despite the good news of today’s report, is currently trading around 575 at the time this post was written.

So, to recap: Apple’s selling slightly better than Android in the U.S. But not as well as Android internationally. But Apple rakes in way more profit. But its stock is down.

Sometimes the tech-research industrial complex reminds me of a James Brown song: Talkin’ loud and sayin’ nothing.

Businessweek.com — Top News

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WestJet embraces tech to woo business travelers

TORONTO (Reuters) – WestJet Airlines Ltd will use technological innovation, including a new Internet ticket booking system, to help it transform from a no-frills carrier to a lower-cost full-service airline courting lucrative corporate travelers, its chief executive said on Monday.

Canada’s second-biggest airline plans to launch a series of technology systems, most notably the new online booking engine, which will sell three tiers of tickets, in the next two months.

“Companies evolve or they die,” Chief Executive Gregg Saretsky told Reuters in a phone interview from the company’s Calgary head office.

“We’re 16 and going on 17 years old and we can’t stay just as we were 17 years ago. The world has changed. And we are changing to be more relevant for a broader segment of guests.”

The new Internet booking system, which WestJet hopes to launch in late January, will sell economy, mid-tier and premium tickets. That is a major shift from its current system, which sells only the lowest-priced ticket available.

Economy tickets under the new system will continue to sell the lowest available fare, but the cancellation fee for them will jump to C$ 75 ($ 75.48) from C$ 50. Mid-tier tickets will have a C$ 50 cancellation fee.

Premium tickets, unavailable until late March when WestJet finishes reconfiguring its 100 Boeing 737 planes to allow more leg room, will include priority screening and boarding, free cancellations and flexibility on ticket changes.

Pricing for those tickets, which may include free meals and drinks and an extra baggage allowance, has not yet been determined. Fares will be well below half the price for business class at WestJet’s bigger competitor, Air Canada, Saretsky said.

“It’s time for us to be more serious with respect to going after business travelers because frankly, they’re the ones who are booking last-minute and are happy to pay for the conveniences,” Saretsky said.

WestJet will launch its premium economy service with 24 seats per plane, but will consider expansion if it proves “wildly successful,” he added.

POISED FOR CHANGE

WestJet, which has spent about C$ 40 million over the past two years on technology projects, is poised for major changes in 2013 as it readies to launch a new regional airline, Encore.

Saretsky hopes that WestJet’s switch in coming weeks to a new Internet phone system will allow ticket reservation agents to work from home and help make room for Encore staff.

Some 750 reservation agents work at WestJet’s Calgary offices, which house about 2,400 staff. Space will be needed for Encore employees over the next 18 months while their office, hangars and maintenance stores are constructed at the WestJet campus.

Encore will be launch in the second half of 2013, “probably closer to July than December,” Saretsky said, with seven Bombardier Q400 planes.

While WestJet won’t announce Encore’s schedule until Jan 21, the carrier will initially serve only “a handful” of new cities, with ticket prices up to 50 percent below Air Canada’s, he added.

Over the next two months, WestJet will also roll out a guest notification system that alerts travelers via email about their flights, allowing them to check in remotely.

Such self-service technology will be critical as WestJet faces increasing labor costs, Saretsky said.

Wage and benefit costs, which represent about a third of operating costs, have climbed 50 percent since WestJet was founded in 1996.

“You can see that creates a little bit of drag on earnings,” Saretsky said. “We’ve got to find ways of reducing our component costs.”

If WestJet can increase self service options for travelers, that could limit the need for new employees, Saretsky said. Management also wants to improve attendance management, so that fewer employees book off sick around long weekends, and more quickly clean and process planes between flights, he said.

(Reporting By Susan Taylor; Editing by Peter Galloway)

(This story was corrected to show that WestJet is replacing its Internet booking engine, not entire reservation system, in the first and second paragraphs)

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32% of Young People Use Social Media in the Bathroom

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UK’s Prince William and wife Kate expecting a baby

LONDON (Reuters) – Britain‘s Prince William and his wife Catherine are expecting a baby, destined to be the country’s future monarch, although the mother-to-be is in hospital with a type of very acute morning sickness that sometimes indicates twins.

“Their Royal Highnesses The Duke and Duchess of Cambridge are very pleased to announce that The Duchess of Cambridge is expecting a baby,” the prince’s office said in a statement on Monday, adding that Queen Elizabeth and the royal family were delighted.

The couple, officially known as the Duke and Duchess of Cambridge, married in April last year, amid a global media frenzy and there has been much speculation, particularly in U.S. gossip magazines, about a possible pregnancy.

“It’s only been a matter of time. Everyone has been waiting for Kate to announce that she was pregnant,” Claudia Joseph, who has written a biography of the duchess, told Reuters.

A spokeswoman for the couple said 30-year-old Catherine, widely known as Kate, was in the King Edward VII Hospital in central London suffering from Hyperemesis Gravidarum, an acute morning sickness which causes severe nausea and vomiting and requires supplementary hydration and nutrients.

Professor Tim Draycott, a consultant obstetrician at the University of Bristol, said the condition was common in the early weeks of pregnancy but did not put the baby at any increased risk, although in extreme cases it can lead to the baby being born with a slightly low birth weight.

Draycott told Reuters it may also indicate more than one royal baby may be in the offing.

“Hyperemesis is slightly more common with twins,” said Draycott, explaining that the condition affected around one in 100 to 200 pregnant women.

William, a Royal Air Force helicopter pilot, was at her side and she is likely to remain in hospital for several days. There was no detail about when the baby was due, although the prince’s spokesman said she was less than 12 weeks pregnant.

“I’m delighted by the news that the Duke and Duchess of Cambridge are expecting a baby,” Prime Minister David Cameron said on his Twitter website. “They will make wonderful parents.”

BABY WILL BE KING, OR QUEEN

William, Queen Elizabeth’s 30-year-old grandson, is second in line to the British throne, and their first child will become the third in succession when he or she is born.

Last year Britain and other Commonwealth countries which have the queen as their monarch agreed to change the rules of royal succession so that males would no longer have precedence as heir, regardless of age.

The agreement also means an end to a ban on a future monarch marrying a Catholic, a stipulation dating back some 300 years.

Britain’s royal family are currently riding the crest of popularity on the back of William and Kate‘s wedding and the queen’s diamond jubilee this year which has witnessed nationwide celebrations.

“It’s something everyone can look forward to, just like their wedding brought the whole nation together,” said Johanna Castle, 25, a sales assistant in an east London homewear and fashion store.

The young royal couple have become global stars after some two billion people tuned in to watch their glittering marriage ceremony and the sumptuous display of pageantry that accompanied it, and barely a day goes by without a picture of Catherine appearing in the pages of Britain‘s royalty-obsessed newspapers.

The duchess, the first “commoner” to marry a prince in close proximity to the throne in more than 350 years, is now a fashion icon, with her attire scrutinized every time she steps out in public and followed by legions of women around the world.

U.S. President Barack Obama and his wife Michelle were one of the first to send congratulations, an indication of the young royals’ popularity across the Atlantic.

“I know they both feel that having a child is one of the most wonderful parts of their lives. So I’m sure that will be the same for the Duke and Duchess of Cambridge,” said White House spokesman Jay Carney.

With their fame has come unwanted attention, and there was anger in Britain when topless photos of Kate relaxing on holiday were published in a French magazine in September.

The pictures rekindled memories of the media pursuit of William’s mother, Princess Diana, who was killed in a car crash in Paris in 1997 while being chased by paparazzi.

“I will be very surprised if this isn’t handled with the utmost tact and sensitivity,” said media commentator Steve Hewlett. “Newspapers realize there’s a huge amount of goodwill towards Will and Kate, and they take their cue from their readers.”

“DADDY’S LITTLE CO-PILOT”

Kate made her last public appearance on Friday when she returned to her old school – a minor event that nonetheless generated live television coverage on news channels – when she looked healthy and joined in a game of hockey with pupils.

Earlier in the week William had hinted at a pregnancy during a visit to Cambridge in central England when they were given a home-made baby suit emblazoned with the words “Daddy’s little co-pilot”, a reference to William’s job.

“When I gave it to him he said ‘I’ll keep that’, and handed it to his aide,” said Samantha Hill.

Joseph, author of “Kate: The Making of a Princess”, said she believed the couple, who currently live in north Wales where the prince is based as a search and rescue pilot, had been waiting for the right moment to have a baby.

“My feeling has always been that they were not going to take the spotlight away from the queen in her Jubilee. But now 2013 is going to be William and Kate’s year,” she said, adding the couple would make wonderful parents.

“We have seen her with children and she is lovely with them, she’s got the natural touch, and her parents run a party business and she has spent a lot of time with children,” Joseph said. “(William) he has always talked about wanting children, so I am sure he is delighted.”

(Additional reporting by Tim Castle, Peter Schwartzstein and Natalie Huet in London and Steve Holland in Washington; editing by Paul Casciato)

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Auto sales race to five-year high for November

(Reuters) – Auto sales in November raced to a five-year high for that month on a rebound from storm-ravaged October and the need to replace aging vehicles, leaving industry executives optimistic about 2013.

Sales in November rose 15 percent to 1.14 million vehicles, the highest level for that month since 2007, before a recession caused a dramatic decline in demand and led to the bankruptcy filings of General Motors Co and Chrysler.

“Vehicle sales are one of the encouraging spots of our economy,” said Gary Bradshaw, portfolio manager with Hodges Capital Management in Dallas.

Ford Motor Co , Honda Motor Co <7267.T> and Nissan Motor Co <7201.T> posted better-than-expected sales, while Chrysler Group LLC, Toyota Motor Corp <7203.T> and Hyundai Motor Co <005380.KS> also reported strong increases that industry executives and investors said should continue through the end of the year.

However, sales for GM came in short of expectations. The No. 1 U.S. automaker said it benefited less than its rivals from the November recovery after Superstorm Sandy hit the U.S. Northeast as a smaller share of GM‘s sales come from that region. It also relied less on incentives.

Auto sales are an early indicator each month of U.S. consumer demand, and the improving housing market and rising consumer confidence have industry executives optimistic heading into 2013.

“Looking at the national picture, the apparent recovery in housing that we talked about last month and the encouraging new data on consumer sentiment and confidence are all positive factors,” Kurt McNeil, GM‘s vice president of U.S. sales operations, said on a conference call.

He declined, however, to provide a 2013 industry sales forecast until a deal is reached to avoid the so-called fiscal cliff, a combination of federal spending cuts and steep tax increases that could tip the U.S. economy back into recession.

“Exactly how much growth we can expect next year will depend in part on how Congress and the president resolve the fiscal cliff issue,” McNeil added. “Consumers hate the uncertainty, so an agreement on ways to reduce long-term federal budget deficits could remove an impediment to growth.”

POST-SANDY SALES

The 15 percent sales gain in November easily surpassed the gain of 11 to 13 percent most analysts had expected. The annual sales rate in November of 15.54 million was the industry’s strongest for any month since the 15.55 million rate of February 2008.

Superstorm Sandy hurt the last few days of sales in October, which finished below expectations, but many consumers simply shifted their purchases to November. In addition, the average age of cars on the road has risen to just above 11 years, and industry officials say that will continue to drive demand.

McNeil said the auto industry is clearly heading this year toward the high end of GM‘s forecasted range of 14 million to 14.5 million. Many analysts expect the industry to finish 2012 with 14.4 million sales, which would mark the strongest year since the 16.1 million of 2007.

TrueCar.com analyst Jesse Toprak expects U.S. auto sales to rise to 15.4 million next year. “Stable growth is really the motto of the industry.”

STEADY RECOVERY

Jonathan Browning, CEO of Volkswagen Group of America, sees a continuation of a steady recovery for the economy as well as for U.S. December and early 2013 auto sales, but expressed concern about the negative impact on consumer confidence if the fiscal cliff occurs. VW brand sales rose more than 29 percent in November.

Ken Czubay, Ford’s vice president of U.S. sales, agreed, saying “the clock is kind of ticking,” in reference to the Washington talks on avoiding the fiscal cliff.

Ford’s November sales rose 6.5 percent to 177,673 vehicles, better than even some of the most optimistic forecasts for the No. 2 U.S. automaker. In a more positive sign for consumer demand, Ford’s retail sales rose 12 percent.

The company had its strongest small-car sales for the month in 12 years. Demand for Ford’s popular F-150 full-size pickup truck increased 17 percent, while GM‘s Chevrolet Silverado pickup saw sales drop 10 percent.

GM, with 139 days’ worth of Silverado inventory at the end of November, blamed aggressive incentives by Chrysler, Nissan and Ford for the decline, and said it would focus on curtailing production of trucks rather than risk becoming trapped in a price war.

GM, with 96 days’ worth of Cruze small cars in inventory at the end of November, plans to idle the Lordstown, Ohio, plant where the car is built for two weeks in December instead of the planned one week to reduce supplies, said two people with knowledge of the plans who asked not to be identified. A spokesman did not confirm the plans.

Ford’s shares closed down 0.3 percent at $ 11.41, while GM shares fell 1.4 percent to $ 25.51 on the New York Stock Exchange on Monday.

Ford said it planned to build 750,000 vehicles in North America in the first quarter of 2013, which would be an 11 percent increase from 2012. That would be the highest first-quarter production level since 2006.

GM’s sales rose 3 percent to 186,505 cars and trucks, below the expectations of several analysts. The company said the average price paid per vehicle rose $ 750 from last year.

TrueCar estimated that the industry’s average vehicle selling price in November rose 1.1 percent, or $ 335, from last year, and rose a similar amount from October to $ 30,832.

Chrysler, majority-owned by Fiat SpA , said sales rose 14 percent to 122,565 cars and trucks, its strongest result since 2007.

Toyota’s sales rose more than 17 percent to 161,695 vehicles. Honda and Nissan both reported better-than-expected results, with the former jumping about 39 percent and the latter increasing 13 percent.

Hyundai said sales increased 8 percent to the company’s all-time high for the month. November marked the first sales results since the South Korean automaker and its Kia Motors Corp <000270.KS> affiliate announced they had overstated the fuel economy ratings by at least a mile per gallon on more than 1 million recently sold vehicles.

In the battle for the luxury sales title for the U.S. market, Daimler’s Mercedes brand leads last year’s winner, BMW , by fewer than 2,000 vehicles with one month to go.

(Reporting by Ben Klayman and Bernie Woodall in Detroit; editing by Jeffrey Benkoe, Maureen Bavdek and Matthew Lewis)

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