It's against this background that US Federal Reserve Chairman Ben Bernanke will step before Congress for his semi-annual testimony on Wednesday. He will likely be barraged with questions about Friday's jobs report - a report so across-the-board disappointing that JPMorgan economist Michael Feroli called it "worse than Spinal Tap's 'Shark Sandwich.'"

The US economy created just 18,000 jobs in June, much less than the 90,000 economists had expected. A US retail sales report may offer a little bit of hope on Thursday if it shows Americans spent money left over from a recent retreat in gasoline prices on other items. "We're in a situation where the data is noisy and choppy," said Michael Hanson, a senior economist at Bank of America.

"For a central banker, you're now in risk management mode: 'We want to be ready to calm the markets in case we get more bad data, but we don't want to jump the gun, either.'" Bernanke has argued that the biggest factors affecting growth in the first half of the year are temporary in nature: supply disruptions due to the Japanese earthquake, inclement weather and a surge in oil prices earlier this year. He is expected to stick to that assessment.

One of those risks is Europe's escalating debt crisis. Contagion is already evident from the growing risk premia on debt issued by Spain and Italy, which some analysts view as a warning signal. Lower-rated euro zone government bonds have faced increased pressure since Moody's cut Portugal's credit rating to junk last week. "There is not expected to be much of a resolution, so all together there is a lot of asymmetric risk out there," said Mark McCormick, currency strategist at Brown Brothers Harriman.

China raised interest rates for the third time this year on Wednesday as taming inflation remains a top priority even as the pace of growth in its vast economy slows. "Unlike in Japan and the US, where we believe growth has slowed for temporary reasons, policy tightening in the euro area and China seems likely to yield a more persistent slowing in growth," Barclays' Maki wrote in a note to clients.

European Central Bank President Jean-Claude Trichet will attend the meeting along with Jean-Claude Juncker, chairman of the region's finance ministers, European Commission President Jose Manuel Barroso and Olli Rehn, the economic and monetary affairs commissioner, three official sources told Reuters. Van Rompuy's spokesman Dirk De Backer said: "It's a coordination, not a crisis meeting." He added that Italy would not be on the agenda and declined to say what would be discussed.

However, two official sources told Reuters that the situation in Italy would be discussed. The talks were organized after a sharp sell-off in Italian assets on Friday, which has increased fears that Italy, with the highest sovereign debt ratio relative to its economy in the euro zone after Greece, could be next to suffer in the crisis. A second international bailout of Greece will also be discussed, the sources said.

Senior euro zone officials worry that progress toward a second Greek bailout, which would also total around 110 billion euros and aim to fund the country into late 2014, is not being made quickly enough and that the delay is poisoning investors' confidence in weak economies around the region. "We need to move on this in the next couple of weeks. It's not a case of waiting until late August or early September as Germany is saying. That's too late and markets will make us pay for it," a top euro zone official told Reuters on Saturday.

In Germany on Sunday, President Christian Wulff said Greece would need a lot longer to resolve its debt problems than many people in Europe were now acknowledging. Wulff, a former leader in Chancellor Angela Merkel's conservative Christian Democrats and now Germany's ceremonial head of state, told ZDF television there was a need for "an overall concept" for resolving Europe's debt crisis. "It can't be something that will suffice for a three-month period but rather has to offer solutions to the problem that will cover the next 10 to 15 years," Wulff said.

The debt and the delusion are both all-American: $14 trillion (8.75 trillion pounds) of debt has been amassed and there is no cogent plan to reduce it. The figure is impossible to comprehend: easier to focus on the fact that it grows at $40,000 (25,000 pounds) a second. Getting out of Afghanistan will help but actually only at the margins. The problem is much bigger than any one area of expenditure.

The economist Jeffrey Sachs, director of Columbia University's Earth Institute, is no rabid fiscal conservative but on the debt he is a hawk: "I'm worried. The debt is large. It should be brought under control. The longer we wait, the longer we suffer this kind of paralysis; the more America boxes itself into a corner and the more America's constructive leadership in the world diminishes."

The author and economist Diane Coyle agrees. And she makes the rather alarming point that the acknowledged deficit is not the whole story. The current $14 trillion debt is bad enough, she argues, but the future commitments to the baby boomers, commitments for health care and for pensions, suggest that the debt burden is part of the fabric of society: "You have promises implicit in the structure of welfare states and aging populations that mean there is an unacknowledged debt that will have to be paid for by future taxpayers, and that could double the published figures."

Richard Haass of the Council on Foreign Relations acknowledges that this structural commitment to future debt is not unique to the United States. All advanced democracies have more or less the same problem, he says, "but in the case of the States the figures are absolutely enormous".

Mr Obama is struggling to marshal support for a budget package that would cut the national debt by $4 trillion (2.5 trillion pounds). The US risks defaulting on its debts in just over three weeks, when the current federal budget runs out. Eight top Senate and House of Representatives leaders met - unusually - on a Sunday in the Cabinet Room of the White House.

As the talks got under way, Mr Obama was asked whether they could "work it out in 10 days". "We need to," he replied. The Republican Speaker of the House of Representatives, John Boehner, said on Saturday that he favoured a less ambitious target for debt reduction of $2 trillion. Republicans baulk at tax increases in the Obama proposals. And his Democrat allies are no more enthusiastic about proposals to cut social welfare and Medicaid.

US government currently runs a $1.5 trillion budget deficit, requiring it to issue debt in the form of treasury bills, bonds and other securities. Public debt was $14.3 trillion on 31 May, up from $10.6 trillion when Mr Obama took office in January. Most is held by the public, with the rest held in US government accounts. Congress has voted to raise the US debt limit 10 times since 2001.

Recent polls show that 69% of Pakistanis see the US as more of an enemy than a partner. American taxpayers are increasingly asking: Why give aid to Pakistanis if they don't want it? So this move is partly driven by pressure in Congress to cut spending to deal with mounting debt. It's also technical - no point sending some equipment if American trainers are not in Pakistan to use it. Big military deliveries won't be affected so the impact is limited.

Still, this is a strong message by the Obama administration - the first time it withholds aid from Pakistan on purpose to express displeasure with its actions. It's an attempt to force the Pakistani army to choose between its relationship with America and its ties with militant groups. It may work, it could also backfire, which is why Washington remains careful not to push too hard.

Pakistan Information Minister Firdous Ashiq Awan said Admiral Mullen's statement was "extremely irresponsible and regrettable". She said it would cause difficulties in relations between the sides and prove a setback to the war against terror. The increasing US drone attack on militants inside Pakistan along the Afghan border is also a continuing source of antagonism.

British military trainers were also withdrawn at the request of the Pakistani government last month.

Mr Fry, 75, is understood to have brokered the Coca-Cola deal, despite accusing the Government last July of being 'bribed' by fast food giants. The money is to develop part of the charity's website devoted to low-calorie artificial sweeteners. Many of Coca-Cola's drinks, such as Diet Coke, Fanta Orange Zero and Lilt Zero, include sweeteners like aspartame, acesulfame-K and saccharin, which have been linked to health concerns. Recent studies linked aspartame to pancreas damage, cancer and premature births.

A senior charity source said: 'In July Tam Fry was horror-struck at the government handing the anti-obesity brief to the likes of Coca-Cola and by the following month he was holding out the begging bowl. Yet it has been known for years that diet drinks are bad in relation to obesity.'

A Coca-Cola spokeswoman said: 'We provided the charity with an educational fund to support its communications regarding low and no-calorie sweeteners during 2011. There is no product endorsement as part of this affiliation.' The charity's chairman David Haslam said: 'We have an independent board assessing the health benefits of artificial sweeteners. Coca-Cola has no influence over our findings.'

It was a sentence that sent shock waves through the international world of media: "This Sunday will be the last issue of the News of the World." The announcement was part of a statement by James Murdoch, the son of Rupert Murdoch and CEO of News Corporation Europe, that was read out to News of the World staff on Thursday afternoon. There will be no commercial advertisements in the paper's final issue, and any advertising space will be donated to charity, Murdoch said in his statement.

The shock decision to close the 168-year-old newspaper came after a week of revelations about a phone-hacking scandal that have put the paper's owner News International - a subsidiary of Rupert Murdoch's News Corporation - under increasing pressure.

Many observers felt that Thursday's decision to close the newspaper was a smart move on the part of Rupert Murdoch's News Corporation. There were fears that the scandal could potentially derail a much bigger deal involving the group's bid to purchase the portion of satellite broadcaster BSkyB that it doesn't already own. By taking decisive action on the News of the World affair, the media giant may be trying to overcome potential resistance to the deal from the British government, which needs to approve the takeover.

The center-left Suddeutsche Zeitung writes:

"All British governments function according to the same reflex: They all want to curry favor with Murdoch and his newspapers. When the tycoon lends his support to the opposition camp, then many people in Britain interpret this as a demand for a change in government."

"There is a trivial motive behind Murdoch's behavior, his market power and his coarse desire for political influence. Murdoch, a despised and unwanted interloper in the British media landscape, yearns for respect and puts the fear of God (into others). Murdoch wants a bigger role in the apparatus of government than is appropriate for a newspaper publisher. Under a feeling of invulnerability, a culture of lawlessness thrived in his company, where his staff did not even shrink from gambling with the fate of abducted children. The British political establishment tolerated this state of affairs - and will now have to pay the price."

Europe needs a strong and powerful center - or it will fail. A situation in which a country like Greece, whose economic output comprises between 2 percent and 2.5 percent of that of the entire euro zone, can imperil the European economy and drag the European common currency to the brink of failure reveals serious design flaws in the political constitution.

Complaints about the fraudulent machinations of the Greeks during their accession to the euro zone, Greece's administrative deficiencies (the country doesn't even have a nationwide land registry office) and the lack of discipline and commitment within portions of the Greek population are a sideshow at best. The real problem is that all these problems were known about 10 years ago - and that no consequences were drawn from this knowledge.

Another example of the failure of the European elites was their claim that the introduction of the euro on the Continent would not only create a market bigger than the US market, but also that the euro also would have what it takes to become the global economy's second reserve currency, next to the dollar. But the parallel to this idea - the need for at least one European rating agency that could hold its own against the American rating agencies - was ignored.

The Europeans were determined to challenge the dominance of the dollar, together with all of the advantages it created for the United States, and yet they positioned the euro in an unprotected environment. It could be attacked at any time because the US rating agencies could seek out the weakest links in the euro group and apply pressure there. The prestige of the euro was and remains highly vulnerable. Instead, a project like the euro should have been prepared in a way that established strategic safeguards.

Even if Europe manages to muddle its way through the euro crisis and the Greek collapse, this underlying problem isn't going to go away. In fact, such crises can repeat themselves at any time. A more or less orderly national bankruptcy for Greece would be merely a tiny step toward saving the euro. The key step is a political reconstitution of Europe, a reconstitution in which democratization would be a real option and would not pose the threat of decline and disintegration.

The Federal Reserve said Friday that consumer borrowing rose $5.1 billion in May, the eighth straight monthly increase. It followed a revised gain of $5.7 billion in April. Borrowing in the category that covers credit cards increased, as did borrowing in the category for auto and student loans.

The overall increase pushed consumer borrowing to a seasonally adjusted annual level of $2.43 trillion in May. That was just 1.7 percent higher than the nearly four-year low of $2.39 trillion hit in September.

Borrowing is a sign of confidence in the economy. Consumers tend to take on more debt when they feel wealthier. That boosts consumer spending. Ultimately, it gives businesses more faith to expand and hire. But an increase in credit card debt can also be a sign of people falling on harder times.

And with three months to go still in fiscal year 2011, the government has racked up $973 billion in total deficits, a pace which is slightly better than 2010, when the government had just crossed the $1 trillion mark at this point. The figures come as lawmakers are trying to hash out a deal on long-term reduction to the country's skyrocketing debt.

CBO analysts said interest on the debt accounts for an ever-increasing share of spending: $31 billion in June alone, and $202 billion for the first nine months of the fiscal year, which is 18 percent higher than 2010.

The government has run a deficit for 33 straight months, dating back to October 2008, when then-President George W Bush and Congress began to grapple with the financial crisis. That's the longest streak since the Treasury Department began keeping records in 1980.

"In the month of Bahman (January 21-February 19) two missiles with a range of 1,900 km (1,180 miles) were fired from Semnan province (in northern Iran) into the mouth of the Indian Ocean," Amir Ali Hajizadeh, head of the Revolutionary Guards' aerospace division, told a news conference some of which was shown on television.

Iran usually tests its missiles in extensive deserts in the heart of the country, so the firing into the Indian Ocean is an unusual move, aimed to prove Tehran's longstanding claims it can hit targets beyond its borders. Television showed a missile being fired but the announcer did not specify if the pictures were of the Indian Ocean test-firing. No pictures were shown of a target being hit at sea.

The announcement came after a 10-day military exercise by the elite Guards that was designed to deter Iran's enemies by showing Iran is ready and able to hit back at US bases in the Middle East and at Israel. The United States and Israel have not ruled out military strikes on Iran if necessary to stop it getting nuclear weapons.

At least a dozen people were hurt in the demonstration for electoral reform in downtown Kuala Lumpur. There were no reports of serious injuries but some analysts said the police action was excessive and would dent Najib's image. "We are not criminals, we are just asking for free and fair elections," opposition leader Anwar Ibrahim's daughter, Nurul Izzah Anwar, told reporters after her father was knocked down and hurt in a melee when he and his supporters were tear gassed.

"Many innocent people were injured. We condemn this act of cruelty by UMNO and Barisan Nasional," she said, referring to Najib's party and the ruling coalition. Street protests are rare in this Southeast Asian nation, but foreign investors are worried that any groundswell of anti-government sentiment could delay economic reforms seen as essential to draw investment.

If he is put under popular pressure, Najib may reconsider plans for a snap election and hold back on reforms such as cutting fuel subsidies or unwinding an affirmative action program for the country's Malay majority.

David Cameron was given a personal guarantee by Rupert Murdoch that Andy Coulson was safe to take on as his Downing Street press chief, The Independent on Sunday learnt yesterday, as the fallout from the News of the World phone-hacking scandal threatened to escalate into all-out war between the UK's two most powerful men.

The Prime Minister had already cooled relations with the 80-year-old press baron on Friday by saying that his son, James Murdoch, has "questions to answer" over News International's handling of the scandal. The Battle of Wapping 2011 will be intensified by the revelation that Mr Cameron was told by Mr Murdoch twice that, despite fears over Mr Coulson's connection to the phone-hacking scandal, there was no problem with the former editor.

After this, Mr Cameron promised he would defend Mr Coulson's position. The 'IoS' (Independent on Sunday newspaper) can reveal that the cosy relationship between the Prime Minister, Mr Murdoch Senior, News International's chief executive Rebekah Brooks and Mr Coulson has been severely damaged by the hacking crisis, which caused the closure of the 168-year-old tabloid newspaper this weekend. Mr Cameron faces serious questions over his judgement in appointing Mr Coulson, who was arrested on Friday by police investigating hacking and illegal payments to police officers.

Meanwhile British Prime Minister David Cameron came under pressure to speed up an inquiry into the allegations of widespread voicemail-hacking, which could jeopardize News Corp's plan to take over the British broadcaster BSkyB. The scandal has raised questions about relations between politicians, including Cameron - who hired a former editor of the paper as his spin doctor - and powerful media owners such as Murdoch, 80.

It has also brought to light accusations that journalists working for Murdoch and others paid police for information. The front-page headline on Sunday's final edition of the 168-year-old News of the World, best known for its lurid stories of wrongdoing and the sexual misdemeanors of celebrities, said simply "Thank You & Goodbye."

Alan Rusbridger, editor of the left-leaning Guardian newspaper, which has led the way in uncovering the scandal, said in a video on the Guardian's web page: "We've had both the prime minister and the leader of the opposition making the kind of statements that a week ago would have seemed suicidal for politicians, essentially conceding they had turned a blind eye to the abuse of press power because they wanted to keep in with Rupert Murdoch."

Ordinary people are providing what help they can for families sheltered in the ruins of former government buildings. Somalia is at the centre of a drought affecting around 10 million people in four countries in the Horn of Africa. There are daily deaths in Mogadishu, with eight people dying overnight in just one area.

The rains have begun and with temperatures dropping, children and the elderly are becoming ill. Islamist militants of al-Shabab, who control much of the country except for the capital, have established a camp outside Mogadishu for drought victims. But they are discouraging people from crossing into government held areas, or leaving for camps in Kenya and Ethiopia.

There, international organisations have set up tents, food stores and clinics.