Rudd in Indonesia for bilateral talks

PRIME Minister Kevin Rudd will discuss trade and the asylum seeker issue with Indonesian President Susilo Bambang Yudhoyono.

But he has hosed down speculation about an imminent deal with Indonesia to fight people smuggling and stem the flow of asylum seeker boats to Australia.

The prime minister reiterated that asylum seeker policies were not "etched in stone" shortly after arriving in Indonesia on Thursday.

Mr Rudd's Friday meeting with President Yudhoyono will take the "overall temperature" of the relationship between the two countries, he has said.

While there, he's expected to also respond further to his decision to allow the ALP national executive licence to intervene in the workings of the NSW branch to root out corruption in its ranks.

Opposition Leader Tony Abbott will be in Sydney.

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Bank of England hints at interest rate cut

THE Bank of England has hinted that it is unlikely to lift record-low borrowing costs any time soon after wrapping up the first policy meeting led by its new governor, Canadian Mark Carney.

The BoE's nine committee members, including Carney, voted by majority to keep the central bank's main lending rate at an all-time low point of 0.50 per cent and decided also to stick by the amount of new money being used to help stimulate the British economy.

But the unexpected hint over the outlook for rates contained in a longer-than-usual final statement, issued at the conclusion of the BoE's latest monthly meeting, caused investors to offload sterling and buy British-listed shares.

"The clear impression is that a Carney-led BoE has a distinctly dovish bias," said Royal Bank of Scotland economist Ross Walker.

"The statement sends a clear, decisive signal - Mr Carney has not spurned an opportunity to provide early guidance, which we expect to be supplemented in subsequent months."

The British pound dived to $US1.5062, the lowest point since May 29, in reaction to receding expectation of a rate hike.

London's FTSE index of leading companies meanwhile soared by more than 3.0 per cent in afternoon trade. Lower interest rates decrease a currency's value but can boost companies' profits.

Recent yields, or rates of return, offered to buyers of government debt have risen in recent times, pointing to impending higher interest rates for consumers in general.

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ECB promises low interest rates

THE European Central Bank has promised to keep its interest rates at current record low levels for an "extended period".

ECB President Mario Draghi says there could even be a cut to support the ailing eurozone economy.

Seeking to calm worries about Portugal, where a political crisis sparked by austerity has rocked markets and driven up borrowing rates this week, Draghi assured that the country "is in safe hands".

The ECB's governing council voted to hold its key interest rate at an all-time low of 0.50 per cent for the third month in a row.

Draghi vowed that "monetary policy will remain accommodative for as long as necessary," in remarks to a press conference.

The ECB's decision-making governing council "expects the key ECB interest rates to remain at present or lower levels for an extended period of time," Draghi said.

"Our exit (from low interest rates) is very distant."

The comments pushed the euro down against the US dollar, but triggered a rally in stock prices all around Europe, since it was the first time that the ECB has ever given such forward guidance.

Draghi's comments came shortly after the Bank of England in London also hinted that it would not lift record-low borrowing costs in the short term.

The decision to issue such "unprecedented forward guidance" was "unanimous", the ECB chief added.

"We had an extensive discussion about a possible interest rate cut," he said.

"But after this extensive debate, we basically unanimously agreed about this forward guidance," Draghi said.

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Turn off Mandela life support, family told

DOCTORS treating Nelson Mandela say he is in a "permanent vegetative state" and have advised his family to turn off his life support machine.

"He is in a permanent vegetative state and is assisted in breathing by a life support machine," said a legal filing related to a family dispute over reburying the remains of Mandela's three children.

"The Mandela family have been advised by the medical practitioners that his life support machine should be switched off."

AFP

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UK police reopen Madeleine McCann case

BRITISH police are opening their own investigation into the 2007 disappearance of toddler Madeleine McCann in Portugal.

They have identified 38 people of interest across Europe.

A two-year review of the original Portuguese investigation, which is officially closed, had resulted in some new evidence, said Detective Chief Inspector Andy Redwood of Scotland Yard, the officer in charge of the probe.

Police also still believe that Madeleine, who was three when she disappeared, may be alive, he said.

"We have identified 38 persons of interest from a number of European countries. Twelve of those people are UK nationals who we believe were in Portugal at the time Madeleine disappeared," Redwood said.

Neither Madeleine's parents Gerry and Kate, nor the friends who were having dinner with the McCanns when she disappeared, were among the suspects.

The McCanns say it is a "huge step forward" in their ongoing search for their daughter.

The couple launched a global campaign to find Madeleine after she vanished from the family's holiday flat in Praia da Luz on Portugal's south coast in May 2007, while they were eating dinner nearby.

Pictures of the smiling blonde girl was plastered on newspapers, posters and websites across the world, although numerous possible sightings came to nothing.

Scotland Yard say they believe she is still alive.

Since the ongoing review was launched in 2011, British police have gathered more than 30,000 documents, visited Portugal 16 times, carried out new witness interviews and generated new theories.

"The review has given us new thinking, new theories, new evidence and new witnesses," Redwood said.

"That has given us the ability to see this case with fresh eyes."

He added: "I believe critically that this is an important moment for Madeleine."

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Egypt security slaps travel ban on Morsi

EGYPTIAN security forces have imposed a travel ban on President Mohamed Morsi and several top Islamist allies over their involvement in a prison escape in 2011, security officials say.

Airport officials confirmed to AFP that they had received orders to prevent the leaders -- including Morsi, Muslim Brotherhood chief Mohammed Badie and his deputy Khairat al-Shater -- from travelling abroad.

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N. Korea restores hotline with South

NORTH Korea has restored its hotline with South Korea and announced it would let the South's businessmen visit a shuttered joint industrial zone, Seoul officials say.

The move came hours after dozens of South Korean firms threatened to withdraw from the zone at Kaesong in the North, complaining they had fallen victim to political bickering between the two rivals.

"The hotline was restored this afternoon after North Korea accepted our request to normalise it," a South Korean unification ministry official said on condition of anonymity.

The move followed months of high tensions and threats by Pyongyang of nuclear war.

As tensions began easing last month, the North restored the hotline across the border truce village of Panmunjom for talks on setting up a high-level meeting to discuss the fate of the zone.

But the line was switched off again after plans for the talks collapsed due to disputes over protocol.

The Kaesong estate, where North Koreans work in Seoul-owned factories, was the most high-profile casualty of the months of elevated tensions that followed the North's nuclear test in February.

Operations at the complex just north of the border ground to a halt soon after the North banned entry by the South's factory managers and other officials on April 3.

About a week later Pyongyang pulled all its own workers out.

In an unexpected change of course on Wednesday, the North sent a message to the South saying South Korean businessmen and managers would be allowed to visit the complex.

It said the businessmen could take emergency steps to avert damage to facilities and materials during the rainy season, according to a unification ministry statement.

South Korean managers could have talks with their North Korean counterparts during their trip, it said.

The North's invitation sparked speculation that it may be ready for dialogue with the South.

But South Korea responded cautiously, saying it would review the proposal and convey its response later.

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