Bullion prices rose to a record nominal high after the assassination of Benazir Bhutto in Pakistan added to nervousness about the world economy. Part of gold's allure is its traditional status as a safe haven. It is seen as a store of value when everything else seems risky. But the bigger drivers behind the rising spot price are a depreciating dollar and the prospect of negative US real interest rates. A better way to think of gold may be as central bankers used to before America dropped the gold standard: not as a commodity, but as another currency. As long as the dollar stays weak, gold's bull run will last.

The arguments for further gains in the gold price are compelling. It looks cheap, despite climbing from a low of about $250 a troy ounce in 1999, when central banks were selling reserves. The UK's decision back then to sell 60 per cent of its official holdings looks particularly poor judgment. Prices have a long way to go before they approach the inflation-adjusted record touched in 1980 when Soviet tanks invaded Afghanistan. At Monday's $859, gold was trading at less than half that level. It could top $1,000 and still be at the lower end of what some analysts argue is a safe haven range.

Gold's rise shows investors are nervous. That is an important message for central banks contemplating interest rate cuts. The Fed must show it is not prepared to allow inflation to take off.

Bureau of Meteorology hydrologist Gordon McKay said some parts of New South Wales, Australia's most populous state, had experienced their worst floods in more than 50 years after a week of rain. Those trapped included 1,000 music fans attending a four-day music festival in the state. Floodwaters also isolated several communities in Queensland and the tropical Northern Territory, which was lashed by a cyclone over the weekend.

The major highway from the east to the west coast city of Perth remained closed yesterday because of a blaze that remained out of control, eight days after three truck drivers died in an attempt to drive through a wall of fire.
Federal lawmaker Barry Haase, whose 2.3 million-square kilometer electorate is described as the largest in the world, called for the Great Eastern Highway to be reopened despite the danger. The closure of the highway was proving costly for interstate trade, he said.

But state official Peter Keppel said the fire, which has burned 41,000 hectares of scrubland since it started Dec. 28, remained dangerous. With temperatures expected to reach 40 degrees Celsius yesterday, the fire could again cross the highway, which is closed between Southern Cross, 370 kilometers east of Perth, and Coolgardie, 560 kilometers east of Perth, Keppel said.

The double whammy means banks are squeezing their customers tighter than ever this winter, as they fight to protect their dwindling profits from the credit crunch and potential legal action over bank charges. New figures from the financial advisers Chase de Vere reveal that 18 banks and building societies - including high street names such as Alliance & Leicester, Halifax, Lloyds TSB and NatWest - have within the past month cut the rate on one or more of their savings accounts by more than December's 0.25 per cent cut in the Bank of England base rate.

Over the same period, 14 lenders also failed to reduce their standard variable mortgage rates by the full 0.25 per cent, according to comparison service Moneyfacts, including Egg and, once again, Alliance & Leicester.
Meanwhile, banks have been busy raising their charges and fees, as they desperately try to recoup the income they are losing as a result of the credit crunch. Most of the big banks have restructured their overdraft charges in the past few months, introducing an ever-more complex web of fees designed to catch out consumers.

Although customers are no longer able to reclaim unfair charges through the courts - pending the outcome of a test case between the Office of Fair Trading and eight of the country's biggest banks, due to begin next week - consumers are still being hit with fees as high as £60 for exceeding their overdraft by only £50. The squeeze has sparked a renewed backlash from politicians and consumer groups.

Even so, experts say, Chinese purveyors of genetically engineered drugs and vaccines -- targeting everything from cancer to Alzheimer's -- are growing at a frenzied pace and are likely to become major actors on the world stage. "There is no question that the sector is established," said Peter Singer of the McLaughlin-Rotman Centre for Global Health in Toronto who was lead researcher of a study published Monday in Nature Biotechnology. "What we found really surprising is that in an industry that's only 10 years old, China has innovative products on the market," he told AFP.

For their study, Singer and his colleagues selected 22 small- and medium-sized biotech firms from literally thousands operating in the health sector for close scrutiny. They looked for companies that were innovative, both scientifically and in business. The portrait that emerged is of a dynamic sector that has been growing 30 percent annually over the past decade, reaching a turnover of three billion dollars in the domestic market in 2005.

A more recent development are international joint ventures and investment. Shenzhen Chipscreen Biosciences, for example, has developed an anti-cancer drug in cooperation with Huya Bioscience, based in San Diego, California. Once the medication is on the market, the Chinese partner will hold the rights for China, while Huya can lay claim to the rest of the world.

WuXi PharmaTech, which was listed on the New York Stock Exchange in the summer of 2007, is the first biotech service company in China with major foreign clients, including US pharmaceutical giant Merck and Britain's AstraZeneca. The fact that WuXi has attracted such companies "punctures a little bit the legend that there is no intellectual property in China," said Singer. Another myth that may soon fall by the wayside is that China can only reproduce what others have done already. "There is no longer a hegemony on the part of industrialised countries in global biotech innovation," Singer said.

Merrill, itself one of Wall Street's biggest casualties of the sub-prime crisis, is the first major bank to declare that a recession in the world's biggest economy is now underway. David Rosenberg, the bank's chief North American economist, argues that a weakening employment picture and declining retail sales signal the economy has tipped into its first month of recession. Mr Rosenberg, who is well-respected on Wall Street, argues: "According to our analysis, this [recession] isn't even a forecast any more but is a present day reality."

His comments are the strongest sign yet that the gloom on Wall Street over the US economy is deepening as the sub-prime mortgage crisis and the credit rout show little sign of easing. Mr Rosenberg points to a whole batch of negative data to support his analysis, including the four key barometers used by the National Bureau of Economic Research (NEBR) - employment, real personal income, industrial production, and real sales activity in retail and manufacturing.

The issue of the faltering nature of the US economy continues to play a large part in the race to replace President Bush, with the majority of candidates seeing it as a key battleground.

The Tory, Labour and Lib-Dem MPs are demanding an amendment be introduced to the Criminal Justice and Immigration Bill to make sure religious leaders are not prosecuted for criticising homosexual lifestyles. The amendment says nothing should prohibit or restrict "discussion of, criticism of, or expression of antipathy towards conduct relating to a particular sexual orientation, or urging persons of a particular sexual orientation to refrain from or modify conduct according to that orientation".

It mirrors a similar clause in Labour's laws against incitement to religious hatred which was forced through only after a protracted battle in Parliament. The proposed law against incitement to hatred of homosexuals would carry a maximum penalty of seven years in jail - a longer sentence than the five years handed down to a typical rapist. It is considered so severe that it has drawn criticism from some homosexuals.

Miss Widdecombe said the amendment was vital to stop the further erosion of the right to free speech. "For the first time in our history you can have a policeman knocking on your door not for something you have done but for an opinion you have expressed and that should be totally contrary to the British way of life," she said.

A month ago Church of England and Roman Catholic bishops united to warn that: "Christians engaged in teaching or preaching and those seeking to act in accord with Christian convictions in their daily lives need to be assured that the expression of strong opinions on marriage or sexuality will not be illegal." They said the police had already shown themselves to be "over-zealous" against Christians who have publicly expressed traditional views on sexuality. Neil Addison, a barrister, said: "Increasingly "hate crime" laws are being used to harass and intimidate ordinary people who dare to disagree with PC orthodoxy."

Stephen Carter, chief executive of the Brunswick public relations firm, will attend Cabinet meetings and attempt to steer Mr Brown away from the sort of scandals which dogged him in 2007.

Last year, the Conservative Party appointed Andy Coulson, not a spin doctor but, as a former editor of the News of the World, wise to the ways of PR, as director of communications. The rise and rise of the profession is not confined to politics: even the McCann family, campaigning to find their daughter Madeleine, sought the help of a former BBC journalist, Clarence Mitchell, to manage their publicity.

When did PR become so important? Are spin doctors taking over the world? If so, does it matter? Is there any hope of curtailing the influence of spin in today's media-savvy society?

The Bank said yesterday it is considering cutting the amount of leeway it gives institutions to keep to their reserves targets - one of the key ways in which it interacts with City banks. The announcement came amid early, tentative evidence that the end may be in sight for the difficulties as interbank borrowing rates dropped yet again in London, and are now at their pre-crisis levels.

Before the start of the turmoil - which became so severe it forced the Bank and its overseas counterparts to plunge billions of extra pounds into the hardest-hit parts of the market - the Bank's rules meant that, after choosing how much to leave it in reserves each month, institutions had only 1pc leeway in keeping to the target during the month.

Amid the credit market crisis, this was widened dramatically to as much as 60pc, as banks struggled to keep their books in order. It remains unusually high at 30pc, and the Bank said while it would remain at this level for the next auction of money later this month, it was considering cutting it back in February. "The Bank will consider ahead of the February maintenance period, in the light of money market conditions at that time, whether some reduction in the target ranges is warranted," it said.

Lord Carey argues that the existing legal protections for Anglican Christianity are outdated and should be abolished. In the Commons tomorrow, MPs will debate an amendment to the current Criminal Justice Bill that would effectively abolish existing legal protections for Anglican Christianity.

As well as Lord Carey, they are supported by figures including Lord Harries of Pentregarth, the former Bishop of Oxford, in a letter in the Daily Telegraph today. Other signatories include Philip Pullman, the author of the His Dark Materials trilogy, Ricky Gervais, the comedian who created the BBC comedy The Office and Richard Dawkins, the Oxford academic and atheist and Nick Hytner the director of the National Theatre. They argue that the blasphemy law "serves no useful purpose" and offers Christian activists a means to intimidate broadcasters, publishers and performers.

"The ancient common law of blasphemous libel purports to protect beliefs rather than people or communities. MOST RELIGIOUS COMMENTATORS ARE OF THE VIEW THAT THE ALMIGHTY DOES NOT NEED THE "PROTECTION" OF SUCH A LAW," THE LETTER SAYS.

Zambia put half of its territory on alert, while floods in Mozambique, fed by heavy rains from there and Zimbabwe, killed six people and cut major transport links to neighbouring countries, relief officials said. The early heavy rains have swollen rivers to alarming levels across the region, catching authorities off guard and forcing governments and aid agencies to step up efforts to avert crisis.

"At least 1.5 million will be displaced by the floods and the government and aid groups will have to provide relief food and shelter to the families in tents for some time," said a senior Zambian government official who wished not to be named. Waters that had reached a depth of six metres (18 feet) forced some people to seek refuge on trees and rooftops in Mozambique, where the United Nations said it would take urgent measures to help victims of the floods.

Guy Robinson, president of umbrella farmers group the Zambia National Farmers Union (ZNFU), told Reuters heavy rains had wiped out some plantings. He said the most affected area was southern Zambia, one of the country's major farming regions. "We are very concerned that the entire crop has been destroyed in some areas due to heavy flooding and it is still raining heavily," Robinson said.

Six weeks have passed since Bush convened a conference in Annapolis, Maryland, to launch the first talks in seven years with the aim of clinching a deal - before he leaves office in a year - that would establish a Palestinian state. But the two sides, bogged down by a dispute over Jewish settlement expansion on occupied land near Jerusalem, have yet to set up working groups to try to resolve many of the thorniest issues in the conflict.

Talks on Monday between the lead negotiators -- Israeli Foreign Minister Tzipi Livni and former Palestinian prime minister Ahmed Qurie -- ended without announcement of an expected agreement on the groups and how they will proceed. Olmert and Abbas will continue the negotiations at a meeting with Livni and Qurie on Tuesday, a day before Bush begins his first presidential visit to Israel and the occupied West Bank.

The delay in reaching a deal on how to conduct the talks underscored the large hurdles facing Bush in meeting his goal of getting Olmert and Abbas to reach an agreement within a year.

The Pope made this affirmation today when he gave his traditional New Year's address to the members of the diplomatic corps accredited to the Holy See. The Holy See maintains diplomatic relations with 176 nations. The [Pontiff] gave an overview of some of the most notable signs of hope and concern on the planet at the beginning of 2008.

Noting the work that began with the December 13 signing of the Treaty of Lisbon, the Pontiff spoke of the process of building a "'European home,' which will be a good place to live for everyone only if it is built on a solid cultural and moral foundation of common values drawn from OUR HISTORY and OUR TRADITIONS and if it does NOT DENY ITS CHRISTIAN ROOTS."

The Pope affirmed this today when he addressed the ambassadors for a traditional New Year's greeting. In his address, the [Pontiff] gave an overview of the state of the world. In addition to diplomatic relations with 176 nations, the Holy See also has relations with the European Union and the Sovereign Military Order of Malta. It also has relations of a special nature with the Russian Federation and the Palestine Liberation Organization, the Vatican press office reported today. Last year, one more nation - the United Arab Emirates - established relations with the Holy See.

When John Paul II became Pope in 1978, the Holy See had diplomatic relations with 85 countries. The Holy See has permanent observers to the UN Educational, Scientific and Cultural Organization, in Paris; the UN Food and Agriculture Organization, in Rome; the Council of Europe; the Organization for Security and Cooperation in Europe; the International Atomic Energy Agency, in Vienna; and the World Tourism Organization, in Rome.

In the most serious such incident in years, U.S. forces were on the verge of firing on the Iranian boats during the incident early Sunday, when the boats?believed to be from the Iranian Revolutionary Guard's navy?turned and moved away, a Pentagon official said. Defense Department spokesman Bryan Whitman called it a "serious incident." Another U.S. official, speaking on condition of anonymity, called it "the most serious provocation of this sort that we've seen yet."

Iran's Foreign Ministry said Monday the confrontation was "something normal" and was resolved, suggesting the Iranian boats had not recognized the U.S. vessels. National Security Council spokesman Gordon Johndroe said the Bush administration urges Iranians "to refrain from such provocative actions that could lead to a dangerous incident in the future."

The incident raised new tensions between Washington and Tehran as President Bush prepared for his first major trip to the Middle East. As one of the world's most vital chokepoints for oil shipping, the 30- mile-wide Hormuz strait has been the subject of previous armed confrontations between the United States and Iran, most notably during the eight-year Iraq-Iran war of the 1980s.

The New York Times said on Sunday the US government was considering expanding the authority of the CIA and the military to conduct far more aggressive covert operations in Pakistan. The US officials considering the move were concerned over intelligence reports that al Qaeda and the Taliban were more intent on destabilizing Pakistan, the newspaper said. Pakistani government and military officials dismissed the report and said Pakistan would not permit any such action.

"Pakistan's position in the war on terror has been very clear -- that any action on Pakistani soil will be taken only by Pakistani forces and Pakistani security agencies," said Foreign Ministry spokesman Mohammad Sadiq. "No other country will be allowed to carry out operations in Pakistan. This has been conveyed at the highest level," he said. Military spokesman Major-General Waheed Arshad rejected the report as baseless, saying no US military operations, overt or covert, were allowed.