Category Archives: Economics

US blocking selection of Ngozi Okonjo-Iweala to be next head of WTO

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Sources say it is unclear if move is attempt to sabotage trade body much criticised by Trump

The US is blocking the appointment of Ngozi Okonjo-Iweala as the next head of the World Trade Organisation despite the former Nigerian finance minister winning the overwhelming backing of the WTO’s 164 members, it has emerged.

Ngozi had moved a step closer to becoming the first woman and the first African to be director of the global trade watchdog after securing the support of a key group of trade ambassadors in Geneva. Soundings taken by a selection panel of three WTO trade ministers found Okonjo-Iweala had far more support than her South Korean rival, Yoo Myung-hee.

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US and European markets dip as Covid containment efforts founder

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Investors’ summer optimism gives way to insecurity as curfews and lockdowns return

Stock markets in the US and Europe fell sharply oas investors focused on signs that rich countries’ efforts to contain the coronavirus pandemic were foundering.

In Europe, the Stoxx 600 index lost 1.8% after heavy falls in German blue-chip stocks. In the US the Dow Jones industrial average closed 2.3% down at 27685.38, while the benchmark S&P 500 fell 1.9% to 3400.97.

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Covid leaves 6m UK small businesses and 16m jobs in ‘precarious position’

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Survey finds nearly two-thirds of entrepreneurs believe their business may not survive pandemic

An estimated 6m small businesses in the UK supporting 16.6m jobs are in a financially precarious position as a result of the pandemic, a London business school has warned.

Nearly two-thirds of entrepreneurs felt their business might not survive the pressures of Covid-19, while more than half predicted they would run out of money within the next 12 months, according to the new study from King’s Business School.

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Sunak’s £12bn scheme for self-employed was ‘terribly targeted’, says analysis

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Review finds testing flaws meant support went to many workers who lost no income but not to others who had

Rishi Sunak’s flagship scheme to help the self-employed through the pandemic has handed £1.3bn to workers who saw no loss of income while giving nothing to 500,000 people left without work, new analysis has revealed.

In a sign of major flaws in the £12.7bn self-employment income support scheme (SEISS), more than 400,000 workers were able to claim support despite losing no income in the crisis.

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With 10 days to go, time and history are not on Donald Trump’s side

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Covid has tanked the gains he made in the economy and any new stimulus could be too late

It all looked so simple for Donald Trump as he took the stage at the World Economic Forum in Davos in January this year. At the start of an election year, the annual gathering of the global business elite was an opportunity to launch his campaign.

It was one Trump eagerly seized. The next 30 minutes was one long boast, detailing how a US economy that had allegedly been on its knees under Barack Obama had been transformed under his stewardship.

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EU seeks Amazon protections pledge from Bolsonaro in push to ratify trade deal

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Brazilian president’s stance on deforestation remains stumbling block for South America agreement

Brussels is in talks with Brazil’s far-right nationalist president, Jair Bolsonaro, over commitments on the future of the Amazon as it seeks to persuade Emmanuel Macron and other EU leaders and parliaments to ratify the trade deal the bloc has negotiated with South America.

The ratification of the draft trade agreement between the EU and the “Mercosur” or Southern Common Market free-trade zone – which spans Brazil, Uruguay, Paraguay and Argentina – has been in doubt almost since it was announced last June.

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Can the centre hold? Germany looks to its Covid-stricken high streets

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Minister battles to rescue retailers amid fears for 50,000 shops and hundreds of thousands of jobs

The stakes for Germany’s high streets could not be greater when the economics minister, Peter Altmaier, summons trade representatives across the country this month for a series of crisis workshops to discuss how to save them from collapse.

In Germany, as elsewhere across Europe and beyond, the coronavirus pandemic has blown a huge hole in street retail – accelerating the decline in footfall precipitated by the rise of online shopping.

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China’s economy was first in to Covid crisis – and is first out

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Beijing was fast to respond and increased public investment; it has not faced a second wave

By its own standards, China’s economy is having a bad year. After four decades of stellar growth, the east Asian country will barely expand at all in 2020.

But just about every country – big or small – has faced a hit from the Covid-19 pandemic, and China has suffered less than most. Whereas most western industrialised nations are still struggling to get back to where they were before the virus struck, Beijing has reported that there was year-on-year growth in the third quarter.

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IMF estimates global Covid cost at $28tn in lost output

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World economic outlook says 2020 impact is less than thought but there will be deep scars

The International Monetary Fund has scaled back its estimate of the hit to the global economy from Covid-19 this year but warned that the final bill for the pandemic would total $28tn (£21.5tn) in lost output.

Gita Gopinath, the IMF’s economic counsellor, described coronavirus as the worst crisis since the Great Depression, and said the pandemic would leave deep and enduring scars caused by job losses, weaker investment and children being deprived of education.

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Nobel Prize in Economics awarded to Milgrom and Wilson for auction theory work – business live

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Rolling coverage of the latest economic and financial news, as The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel is awarded

Earlier:

In the 1960s, Robert Wilson began to investigation auctions with a common value - one that is unknown beforehand, but is the same to all bidders, the Academy continues.

That could be bidding for fishing quotas - where the value is determined by not only the quota, but the future value of the fish. Bidders need to estimate that value, so they could potentially overpay.

This is something known as the Winner’s Curse.

Auctions are everywhere. People use auctions to buy and sell items on internet sites, explains the Royal Academy.

Electricity markets are organized as auctions. Financial assets, CO2 emissions allowances and radio spectrum are all organised as auctions.

The auction theory provided by Paul Milgrom and Robert Wilson is key for understanding how these objectives can be reached.

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Creditors must wake up fast to threat of emerging market debt crisis

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Zambia could become the first country to default on its debts amid the fallout from Covid-19, but it won’t be the last

Zambia is running out of money to pay its debts. It has asked bondholders for breathing space so that it can put a restructuring plan in place. The copper-rich African state is at risk of being the first country to default on its debts since the start of the coronavirus pandemic.

Not the last though. Zambia is the canary in the coalmine, a harbinger of a full-blown crisis that has been lurking in the background from the moment the seriousness of Covid-19 became apparent.

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Summer spending boosted Britain but winter job cuts have yet to bite

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Reductions in government support as the original furlough scheme ends point towards a brutal round of redundancies

The UK economy continued its rapid rebound from the depths of the coronavirus lockdown in August, the latest official data on growth is expected to show on Friday, but many economists are braced for a grim winter as job losses mount.

The Bank of England’s chief economist, Andy Haldane, predicted last week that GDP would be “only around 3-4% below its pre-Covid level” by the end of the third quarter, covering July to September.

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Protests and Covid leave Hong Kong stuck in recession

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Political unrest hit tourism and retail, and coronavirus response has delayed recovery

Hong Kong’s economy was already in recession when the pandemic hit in January. Six months of running battles between pro-democracy campaigners and local government had deterred many of the visitors who fuel the lucrative tourism industry, while the threat of violence on the streets and closures of shops had sent retail sales down nearly a quarter on the previous year.

With much of Asia shut down by coronavirus restrictions during the winter months, there was little expectation of a recovery until the spring, when the level of infections fell to almost zero across mainland China and most of the rest of the region, and the measures could be eased.

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World Bank announces $12bn plan for poor countries to buy Covid vaccines

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Initiative aims to ensure low-income countries are not frozen out by rich nations

The World Bank has announced plans for a $12bn (£9.3bn) initiative that will allow poor countries to purchase Covid-19 vaccines to treat up to 2 billion people as soon as effective drugs become available.

In an attempt to ensure that low-income countries are not frozen out by wealthy nations, the organisation is asking its key rich-nation shareholders to back a scheme that will disburse cash over the next 12 to 18 months.

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Why Joe Biden is better than Donald Trump for the US economy | Nouriel Roubini

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It’s a myth that Republicans handle the economy better – US recessions almost always occur under the GOP

Joe Biden has consistently held a wide polling lead over US President Donald Trump ahead of November’s election. But, despite Trump’s botched response to the Covid-19 pandemic – a failure that has left the economy far weaker than it otherwise would have been – he has maintained a marginal edge on the question of which candidate would be better for the US economy. Thanks to Trump, a country with just 4% of the world’s population now accounts for more than 20% of total Covid-19 deaths – an utterly shameful outcome, given America’s advanced (albeit expensive) healthcare system.

The presumption that Republicans are better than Democrats at economic stewardship is a longstanding myth that must be debunked. In our 1997 book, Political Cycles and the Macroeconomy, the late (and great) Alberto Alesina and I showed that Democratic administrations tend to preside over faster growth, lower unemployment and stronger stock markets than Republican presidents do.

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The Florida patrol attempting to enforce a loosened mask mandate

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A Key West team is expected to enforce a new mandate allowing people to go maskless outdoors if they are 6ft apart – an impossible task among partygoers

Key West code enforcement officer Paul Navarro was halfway through his shift and beginning to see signs of trouble. The crowds on lower Duval Street swelled just after 9pm, and social distancing quickly became impossible on the sidewalks.

Navarro is the last line of defense against the high-risk behaviors which spread Covid-19 and is one of the principal enforcers of the Florida city’s mask mandate – an effort to protect public health and the local economy. Until 16 September part of that balancing act had included a strict mask mandate, now that rule has been loosened.

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What’s missing from the chancellor’s new scheme to save jobs?

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Five measures absent from the chancellor’s winter economy plan

Rishi Sunak’s winter economy plan prioritises additional support for “viable” jobs. However, critics have warned that other measures are still needed to help people who have already lost their jobs or will lose them despite the new government scheme.

Here are five measures that could help keep workers in jobs, but were missing from the chancellor’s winter economy plan:

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Staple food prices rise by 50% in Sudan amid economic strife, floods and Covid

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Cost of sugar, bread and transport soar, while promised World Bank aid is yet to arrive

Millions of people in Sudan are facing hardship as the cost of food and transport soars amid economic turmoil in the country.

The cost of some staple foods like bread and sugar has increased by 50% over the past few weeks, driving inflation to a record high of 167%, up from 144% in July.

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Trump attacks WTO after it says US tariffs on China broke global trade rules

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President says he has to ‘do something’ about the body after it rules that duties on $200bn worth of Chinese goods breached regulations

The United States has described the World Trade Organization as “completely inadequate” after it criticised the Trump administration’s tariffs on China.

The WTO said on Tuesday that the US breached global trading rules by imposing levies on more than $200bn of Chinese goods in the opening salvo of president Donald Trump’s trade war with Beijing two years ago.

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Prevent ‘tsunami’ of job losses when furlough ends, TUC urges Sunak

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UK should adopt German-style wage support for short-time working, unions say

Rishi Sunak has been urged by union leaders to launch a wage subsidy scheme to prevent a “tsunami” of unemployment when furlough comes to an end this autumn.

Demanding the chancellor follows the examples of other leading European countries to avert a looming jobs crisis, the Trades Union Congress said a continental-style system of “short-time working” wage support could be used in Britain to save millions of jobs from redundancy.

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