Tokyo - Japan's key machinery orders marked the largest fall on record in November as corporate capital investment shrank amid global economic slowdown, the government said Thursday.

The private-sector machinery orders dropped a seasonally adjusted 16.2 per cent from October to 754.2 billion yen (8.44 billion dollars).

The November decline shows a 27.7-per-cent drop in unadjusted terms from the same month a year before.

Frankfurt  - The European Central Bank (ECB) meets later Thursday amid market expectations that dwindling inflation and slowing economic growth will force it to deliver another rate cut.

The consensus among economists is that the ECB's 22-member rate-setting council will cut interest rates from 2.5 per cent to 2 per cent for what is shaping up to be a tough economic year.

But some economists believe that the Frankfurt-based bank might decide to leave monetary policy on hold or deliver only a modest reduction of 25 basis points.

Washington - Retail sales in the United States plunged in December as holiday shoppers cut back in a recession and ignored big sales incentives, the Commerce Department said in its initial estimate Wednesday.

Sales tumbled to 343.2 billion dollars, down 9.8 per cent compared to December 2007 and down 2.7 per cent from November, worse than economists expected.

US retailers have suffered their worst holiday shopping season in decades, failing to lure in shoppers despite offers of savings and other incentives ahead of Christmas.

Paris - French consumer prices fell by 0.2 per cent in December compared to the previous month, owing largely to falling energy prices, the government's statistical office INSEE said on Wednesday.

Year on year, inflation stood at 1 per cent, INSEE said, after energy prices fell by 5.6 per cent in December, driven by a drop of 9.4 per cent in the cost of petroleum products.

Over 12 months, the price of petroleum products declined by nearly 15 per cent.

Budapest - Hungarian Prime Minister Ferenc Gyurcsany said on Wednesday that the Hungarian economy could shrink by 2 to 3 per cent this year, a far deeper recession than recent government predictions suggested.

"This year, the economy could show negative growth of minus 2 to 3 per cent, rather than the minus 0.9 per cent entered in the 2009 budget," Gyurcsany said on a breakfast news show on state-owned Hungarian television.

London - The British government announced a new aid package on Wednesday to unlock the credit squeeze by offering loan guarantees to small and medium-sized businesses.

The measures, worth 20 billion pounds (29.6 billion dollars), are aimed at reducing the risks of banks lending to companies struggling in the current economic downturn.

In effect, it means that, in return for a small fee, the state insures banks against firms defaulting on repayments.