What's most striking about the past 50 years of our history is how we have given in without a fight to those who want to revolutionise our society. It is all very well going on about Winston Churchill, but Archbishop Rowan Williams is a figure much more representative of modern Britain. This prelate whimpered last week that Christianity was 'offensive' to Muslims.

Offensive? I know we have been urged to stop being horrid to this inept, terrifyingly well meaning man - and it really is nothing personal - but he does rather ask for it. A few months ago he mused on the possibilities of allowing a little light Sharia Law in this country. This is, I suppose, a point of view. I just can't work out why the leader of a Christian church should hold it.

The Ernst & Young Item club, which uses the Treasury's economic model, will argue in a report tomorrow that the economy will struggle to avoid recession. This comes as a survey by the Institute of Directors shows that business confidence has slumped to the lowest level ever recorded, with company chiefs increasingly gloomy about the investment climate.

These reports follow an interview with Alistair Darling in which the chancellor ADMITTED THE DOWNTURN WOULD BE MORE "PROFOUND" AND LAST LONGER THAN HE HAD EXPECTED. Also, Sir Win Bischoff, chairman of Citigroup, the American financial giant, believes that house prices in Britain and America will keep falling for another two years.

China's emerging rivalry with America as a global superpower will move into the sporting arena next month as its Olympic athletes strive to oust their US counterparts from the top of the medals table for the first time. In a showdown reminiscent of the Cold War-era battles for Olympian dominance, China has put unprecedented effort into ensuring that Beijing 2008 will be a sporting triumph as well as a logistical one. With their athletes already dominant in events such as gymnastics, table tennis and martial arts, Chinese sporting chiefs have spent the past few years focusing on disciplines where Americans have traditionally excelled, including swimming, basketball and athletics.

China's attempt to end America's run of supremacy at the last three Games will add an East-West frisson not seen since the demise of the Soviet Union, which topped the medals board eight times in the post-war period. While the rest of the world's eyes will be on the heroics of the individual contestants, Chinese officials will pay closest attention to the total medal tally.

Mao Zhi Xiong, professor of sports psychology at Beijing Sports University, insisted it was only a "possibility" that China would secure the biggest medal sweep. But he agreed that a Chinese victory would be boost its international prestige. "If you win a lot of medals, then it shows you have advanced as a country," he said. "It means the economy is growing, that living standards are improving and that there is better technology."

Some Zimbabweans are already calling for higher denominations in a country where the official annual inflation rate has exceeded 2,200,000%. Independent economists believe the real rate is many times higher. Zimbabwe's meltdown has left at least 80% of the population in poverty, facing mass shortages of basic goods. The country's central bank has introduced several new notes already this year in response to the hyperinflation. In January, a Z$10 million note was issued, followed by a Z$50 million. By June the denominations had reached tens of billions.

In a notice in the state-controlled Herald newspaper, central bank governor Gideon Gono said the Reserve Bank of Zimbabwe would introduce the new notes - known as special agro-cheques - to help consumers. "THIS NEW $100 BILLION SPECIAL AGRO-CHEQUE will go into circulation on Monday," the notice said. But Zimbabwe residents say the latest note is already worthless, and does not even cover their daily lunch. "Nowadays, for my expenses a day, I need about Z$500 billion," one resident said. "So Z$100 billion can't do anything because for me to go home I need Z$250 billion, so this [note] is worthless."

ZIMBABWE WAS ONCE ONE OF THE RICHEST COUNTRIES IN AFRICA. But it has descended into economic chaos in recent years, with many international observers blaming the policies of President Robert Mugabe.

Pope Benedict XVI told a crowd of about 200,000 people at the Catholic Church's World Youth Day event that they should build a new age free from greed. The world "needs renewal", he said, and challenged the young pilgrims to be agents of change. Earlier in the week, he apologised for abuse carried out by Catholic clergy.

The 81-year-old pontiff was at the centre of a spectacular finale to the Church's six-day-long youth festival, although the numbers attending Mass fell short of the 500,000-plus expected by organisers. The Pope flew by helicopter over many thousands of pilgrims, many of whom had camped out in cold weather at Sydney's Randwick Racecourse in preparation for Sunday's events.

"In so many of our societies, side by side with material prosperity, a spiritual desert is spreading - an interior emptiness, an unnamed fear, a quiet sense of despair," he said in his homily. He said God was asking young people to be "prophets for a new age" in which "hope liberates us from the shallowness, apathy and self-absorption which deadens our souls and poisons our relationships". At the close of his address, the Pope announced that the next World Youth Day, in 2011, would be held in Spain, and pledged to attend.

On that day, some 200 million Europeans went to the polls to elect their representatives to the European Parliament, consolidating the union's ascendancy. EUROPE'S PARLIAMENT LEAP-FROGGED THE US CONGRESS IN SIZE OF POPULATION REPRESENTED, with an additional two member states, Romania and Bulgaria, boosting the numbers still further to almost half a billion people in 2007. Even more critically, in 2005, the GDP of the EU overtook that of the States.

"THE EU IS NOW THE SINGLE LARGEST TRADING PARTNER WITH EVERY CONTINENT EXCEPT AUSTRALIA," he writes in his recent book, Exposed, which considers THE MASSIVE GLOBAL ECONOMIC POWER SHIFT that has occurred as a result of these changes. He looks at how companies and state governments in the US, China and the rest of the world increasingly take their legislative lead - whether willingly or dragged kicking and screaming - on issues such as environmental standards, health and safety regulation and consumer protection not from Washington, but Brussels.

"WITH WEALTH COMES TRADE, AND FROM TRADE COMES THE POWER TO WRITE THE RULES OF COMMERCE," he announces. The EU now is the new biggest economy, and what does this new biggest economy do? THEY START IMPOSING ALL SORTS OF RESTRICTIONS in terms of environmental protection. THEY DEMAND THAT CHEMICALS BE TAKEN OUT of a whole array of consumer products. THEY DEMAND MORE SUSTAINABLE PRODUCTION practices and energy efficiency. NOTHING CLOSE TO THIS HAD EVER HAPPENED BEFORE TO AMERICAN COMPANIES.

But the five Lebanese militants who arrived home Wednesday in an exchange of prisoners and dead soldiers with Israel returned to a country that seemed momentarily united in victory. The Lebanese government declared a national holiday, and almost the entire Lebanese Cabinet - politicians who are more often plotting one another's demise than appearing together in public - received the new national heroes at Beirut airport with flowers, rice, pomp and circumstance.

The contrast with the mood in Israel could hardly have been greater. The very fact that the Israeli government had to barter for the return of two soldiers captured in July 2006 by Hizballah was disappointing enough. The Israeli government had launched a 33-day war to regain its lost boys and destroy the Shi'ite militia but failed on both counts. Moreover, the fact that the two soldiers were returned in black coffins left many Israelis bitter about the price paid by their government: the release of five dangerous militants and the return of the remains of 185 others.

But for all the group-hugging in Lebanon, the real winner of the day was Hizballah leader Hassan Nasrallah, who had orchestrated the trade. HE CLAIMED THE LOPSIDED DEAL AS LEGITIMACY FOR BOTH HIS DECISION TO CAPTURE THOSE TWO ISRAELI SOLDIERS IN THE FIRST PLACE AND HIS WIDER STRATEGY OF ARMED CONFRONTATION WITH ISRAEL. For almost 60 years, Arabs facing Israel have had to choose between defeat and peace, but now, according to Nasrallah, the success of Hizballah's asymmetrical warfare has offered a model for all the movements in the Middle East dedicated to destroying Israel. "The essence of the region is the resistance," he said in a rare appearance to welcome the returning prisoners.

Benedict met with representatives of Muslim, Jewish, Hindu and Buddhist faiths for about 40 minutes during the Roman Catholic church's youth festival, which has drawn hundreds of thousands of pilgrims to Sydney.

"In a world threatened by sinister and indiscriminate forms of violence, the unified voice of religious people urges nations and communities TO RESOLVE CONFLICTS THROUGH PEACEFUL MEANS and with full regard for human dignity," Benedict told a gathering of clerics from different faiths in Sydney. Without mentioning terrorism directly, the pontiff said creating harmony between religion and public life was "all the more important at a time when some people have come to consider religion as a cause of division rather than a force for unity."

The remarks come as the Vatican tries to repair ties with the Islamic world that were strained by a speech he gave in 2006 that appeared to associate Islam with violence, outraging many Muslims.

The APS is also sponsoring public debate on the validity of global warming science. The leadership of the society had previously called the evidence for global warming "incontrovertible." In a posting to the APS forum, editor Jeffrey Marque explains, "There is a considerable presence within the scientific community of people who do not agree with the IPCC conclusion that anthropogenic CO2 emissions are very probably likely to be primarily responsible for global warming that has occurred since the Industrial Revolution."

The APS is opening its debate with the publication of a paper by Lord Monckton of Brenchley, which concludes that climate sensitivity - the rate of temperature change a given amount of greenhouse gas will cause - has been grossly overstated by IPCC modeling. A low sensitivity implies additional atmospheric CO2 will have little effect on global climate.

Larry Gould, Professor of Physics at the University of Hartford and Chairman of the New England Section of the APS, called Monckton's paper an "expose of the IPCC that details numerous exaggerations and extensive errors" Monckton, who was the science advisor to Britain's Thatcher administration, says natural variability is the cause of most of the Earth's recent warming. "In the past 70 years the Sun was more active than at almost any other time in the past 11,400 years ... MARS, JUPITER, NEPTUNE'S LARGEST MOON, AND PLUTO WARMED AT THE SAME TIME AS EARTH."

The measure certified Thursday would rename the Oceanside Water Pollution Control Plant the George W. Bush Sewage Plant. Supporters say the idea is to commemorate the mess they claim Bush has left behind by actions such as the war in Iraq.

Local Republicans say the plan stinks and they will oppose it.

The new framework, which could be announced in the autumn pre-Budget statement, would permit more borrowing as an alternative to increasing taxes. The Tories say such a move would be a final nail in the coffin of Gordon Brown's reputation for prudence. But the Treasury stressed no decision had yet been taken.

The BBC understands that officials are drafting a looser framework so that the Treasury would not have to break the present borrowing limit of 40% of national income.

Benedict, speaking to more than 200,000 pilgrims gathered for the Roman Catholic church's youth festival, expanded on a theme that has led him to be dubbed "the green pope." The crowd, massed on a disused wharf in Australia's largest city, regularly erupted in cheers that gave the event the feel of a sporting event.

"Some of you come from island nations whose very existence is threatened by rising water levels; others from nations suffering the effects of devastating drought," the pope said, referring to global warming. "Perhaps reluctantly we come to acknowledge that there are also scars which mark the surface of our earth: erosion, deforestation, the squandering of the world's mineral and ocean resources in order to fuel an insatiable consumption," he said.

Types of "poison" are afflicting the world's social environment, he said, such as substance abuse, along with the exaltation of violence and sexual degradation, for which he blamed television and the Internet. "The concerns for non-violence, sustainable development, justice and peace, and care for our environment are of vital importance for humanity," Benedict told the crowd.

The documents were deposited with the Italian foreign affairs ministry in Rome on Wednesday. The move came despite doubts over its future after the "no" vote in the Irish referendum. All EU states must ratify the treaty for it to come into force. The EU treaty has proved controversial with unsuccessful attempts in Parliament and the courts to force a referendum to be held on it.

Conservative MP Bill Cash sought a judicial review of the ratification process after the rejection from Ireland. And two High Court judges dismissed a claim by millionaire businessman Stuart Wheeler that there was a "legitimate expectation" of a public vote. Mr Cash branded the ratification a "gross impertinence" and, speaking in the Commons, accused ministers of "effectively bullying the Irish" for voting against it. Mr Wheeler has described the ratification as "absolutely atrocious behaviour" and on Friday will seek permission from a Court of Appeal judge to appeal against that decision.

He said he believed although the "instrument of ratification" has been deposited in Rome, THE GOVERNMENT STILL HAD THE RIGHT TO WITHDRAW IT AND REVERSE ITS DECISION. The "instruments of ratification" were signed by the Queen and Foreign Secretary David Miliband before being deposited in Rome.

The European Union is proposing to take control over Britain's sovereign wealth fund.
The EU, driven by the French, wants to have its own military planning capability and autonomous action backed up by credible military forces.
The European Union is proposing to develop a surveillance force to monitor borders.
The European Union is proposing to take control over the use of cross-border special intervention units.

The European Union is proposing to take more power over emergency action in the event of a disaster.
The European Union is pushing for an increase in non-custodial supervision orders for suspected criminals.

The European Union is to expand its communication activities.
Using the perceived threat of global warming, the EU is proposing to take powers key to the sovereignty of the nation-state.
The EU wants to impose a stealth tax on the carbon dioxide emissions of cars and light commercial vehicles.
The EU is attempting to expand its power over Britain's energy policy.
The European Union wants to control cosmetics.

He argues that Ireland's currency arrangement is likely to worsen the recession, becoming "part of the problem, not part of the solution". Unable to boost the economy by printing or borrowing money, and without the ability of the UK and US to allow the currency to fall, Ireland finds itself without the macro-economic tools to improve the situation. Thus, McWilliams concludes, the government may be forced to re-consider the currency question.