Editor Brian Harrod Provides Comprehensive up-to-date news coverage, with aggregated news from sources all over the world from the Roundup Newswires Network
European commission warns of ‘major shock’ and slashes growth forecast the union
The threat of a full-blown trade war between the US and China and Brexit uncertainty are posing mounting risks to the EU economy, the European commission has warned, after downgrading its growth outlook for 2019.
Brussels’ executive arm said a recent slowdown in global trade volumes had taken its toll across the continent, as it cut its GDP growth forecast for the 28-nation bloc for 2019 to 1.4%, down from a forecast of 1.9% in the autumn.
Report calls for change of priorities and culture to avert catastrophic biodiversity loss
Governments need to ramp up investment in nature restoration and raise the tax burden on companies that degrade wildlife, according to recommendations made to the G7 group of rich nations.
The proposals are part of a growing debate on how to radically change humanity’s relationship with nature in the wake of a new UN mega-report that showed an alarming decline in the Earth’s life-support systems.
President recognises protesters’ demands but vowed to still liberalise the economy
Emmanuel Macron has vowed to make his style of politics more “humane”, but insisted he would press on with his project to liberalise the French economy and overhaul its welfare state despite five months of demonstrations by gilet jaunes (yellow vest) anti-government protestors.
In his first press conference in two years as president, Macron promised €5bn (£4.3bn) worth of cuts to income tax for lower and average earners as well as pension rises for the poorest and vowed no more schools or hospitals would be closed during his presidency, as he responded to protests.
Time likely to be too tight for referendum before end of October, says chancellor
Philip Hammond has played down the possibility that the UK could use the delay to Brexit to hold a second referendum and stressed that he still expects Britain to leave the European Union.
Speaking in Washington, the chancellor said time would be too tight to hold a confirmatory vote before the new deadline of the end of October unless it was triggered over the coming weeks.
Chinese imports slumped in March, driven by a slowdown in US trade amid the tense standoff between Washington and Beijing, raising renewed questions over the strength of the Chinese economy.
Imports fell by 7.6% in March compared with a year earlier, worse than City economists’ forecasts for the volume of goods bought from abroad to grow by 0.2%.
Fund report calls for profits to be targeted by a tougher international tax regime
The International Monetary Fund has warned that the market power exercised by a small number of global companies threatens to stifle innovation and make it harder for central banks to deal with recessions.
Adding its contribution to the growing public debate about the corporate power exercised by the US tech giants such as Google, Amazon, Apple and Facebook, the IMF said it would be concerned if there was any further increase in the clout of already dominant firms.
Stephen Moore, the economics commentator chosen by Donald Trump for a seat on the Federal Reserve board, was found in contempt of court after failing to pay his ex-wife hundreds of thousands of dollars in alimony, child support and other debts.
Erdoğan’s costly move against currency speculators could prove to have major ripple effects
The battle waged by Turkey’s Recep Tayyip Erdoğan against currency speculators is a classic pyrrhic victory. The show of resolve by the self-styled strongman on Wednesday stopped investors from dumping the lira but at enormous cost in both the short and long term. That Turkey will be damaged is beyond question. All that’s in doubt is how severe that damage will be and whether the fallout will be felt elsewhere. Looking at the fragile state of the global economy, there’s every chance it will be.
The backdrop to the latest instalment of a long-running crisis is that Erdoğan is this week facing important local elections at a time when the Turkish economy is in recession. In an attempt to drum up support, Turkey’s president last week condemned Donald Trump’s decision to recognise Israeli control over the Golan heights, but this proved a spectacular own goal by convincing foreign investors that Ankara was on a collision course with Washington. The lira plunged.
European leaders and China’s Xi Jinping put on a show of unity in the face of US tariffs
Donald Trump was not on the guest list for Emmanuel Macron’s mini-summit in Paris, but the presence of the US president was still very much felt as Europe’s leaders sat down to talk trade, business deals and geopolitics with China’s Xi Jinping.
At one level, the message from the meeting of China’s leader with Macron, the German chancellor Angela Merkel and the European commission president Jean-Claude Juncker was obvious: this was a show of unity in the face of Trump’s tariffs aimed across both the Atlantic and the Pacific.
Bond yields also continued to fall across the world with Australian 10-year treasury yields falling to a record low on Monday of 1.756% in what analysts see as a strong indicator of a downturn hitting the resource-rich country.
Xi Jinping visits Rome as Italy becomes first G7 country to back Belt and Road initiative
Italy has become the first G7 country to endorse a contentious plan by China to build a Silk Road-style global trade network, irking its EU and US allies.
The prime minister, Giuseppe Conte, and the Chinese president, Xi Jinping, have signed a non-binding memorandum of understanding (MoU) that could lead to Italy’s participation in China’s Belt and Road initiative (BRI), an ambitious project that envisages Chinese investment in a network of infrastructure projects connecting Asia, the Middle East, Africa and Europe.
Central banks in spotlight amid Brexit uncertainty and growth concerns
The Bank’s reticence to raise rates has been hinted at by Gertjan Vlieghe and Silvana Tenreyro, two of the nine-member monetary policy committee.
Weaker growth prospects have come on top of concerns about Brexit, according to Martin Beck, lead UK economist at Oxford Economics, a consultancy. He expects a 9-0 vote to keep policy unchanged, saying:
The economy’s recent performance has been broadly in line with the MPC’s expectations. But public pronouncements by some committee members on downside risks have indicated a dovish shift around the pace of future rate hikes.
In light of the continued failure to get a Brexit deal through Parliament, Brexit uncertainty remains a key block on action by the MPC.
The Bank of England will also be in action later this week, with a monetary policy announcement on Thursday at midday.
Anything other than a unanimous vote to keep interest rates on hold would be a shock, for fairly obvious reasons.
Mark Carney is then asked about activist investor Edward Bramson, who has used a $1.4bn loan from Bank of America to buy his stake in Barclays (and agitate for a board seat),
Q: Would that loan affect his ability to meet the City’s ‘fit and proper person’s test’?
Earlier in the hearing, Mark Carney suggested that that City has underestimated future interest rate hikes.
The governor pointed out that Bank of England’s most recent economic forecasts - based on market expectations of borrowing costs - showed inflation above the BoE’s target over its three-year forecast period
“In other words, the path of interest rates is not firm enough, it’s not quite high enough for us to be fulfilling our mandate, which sends a broad signal in terms of the stance of policy.”
The US president says it is ‘very important for our farmers’ while adding that trade talks are ‘moving along nicely’
Donald Trump has urged China to abolish tariffs on agricultural products imported from the United States – adding that trade talks between the rival powers were going well.
“I have asked China to immediately remove all Tariffs on our agricultural products (including beef, pork, etc.),” the US president wrote on Twitter.
Sweden and France among states found by the World Bank to enshrine gender equality in laws, but implementation haphazard
If you’re a woman and want to be on an equal footing with men, it’s best to live and work in Belgium, Denmark, France, Latvia, Luxembourg or Sweden. The World Bank, which has tracked legal changes for the past decade, found these were the only countries in the world to enshrine gender equality in laws affecting work.
The bank’s women, business and the law 2019 report, published this week, measured gender discrimination in 187 countries. It found that, a decade ago, no country gave women and men equal legal rights.
Kay Daniel Neufeld, managing economist at the CEBR thinktank, is relieved that America avoided an abrupt slowdown in the last quarter.
However, he also expects growth will be slower in 2019 - averaging 2.3% (again, below that 3% target).
Contrary to most other large economies, the US has bucked the trend and recorded faster GDP growth in 2018 than in the previous year. The weak retail sales recorded for December alarmed analysts fearing an abrupt slowdown to the US expansion in the final quarter of last year, but today’s stronger than expected GDP data suggest the December figures might have been a blip.
Nevertheless, there is little room for complacency. With the world economy slowing and the US –China trade conflict merely on hold, there are plenty of pitfalls to avoid if the US wants to achieve another stellar performance in 2019.”
The US has “proved the doubters wrong” by growing faster than expected in the last quarter of 2018, says James Knightley, ING’s chief international economist.
Here’s his take:
The details show a partial slowdown in consumer spending growth (2.8% versus 3.5% in 3Q18), but it continues to make a strong contribution. In fact, given the equity market turmoil at the time and the poor official retail sales figure for December, this isn’t a bad outcome at all.
Non-residential investment spending actually posted a decent performance, recording growth of 6.2% despite the concerns about what escalating trade tensions could mean in terms of supply chains and corporate profitability.
The US president says he will hold a summit with Xi Jinping to conclude an agreement to end the year-long standoff
Donald Trump has said he will delay an increase in tariffs on Chinese goods that had been scheduled for Friday, citing “substantial progress” in trade talks with China over the weekend.
President said potential delay was justified as deal ‘must be the biggest in history’
President Donald Trump has conceded that he will delay planned increases in import duties on $200bn (£155bn) of Chinese goods if there is progress in trade talks in Washington next week.
Appearing to soften his demand for talks to conclude before 1 March, Trump said there could be a 30- or 60-day extension, should negotiators get closer to a deal. He said a delay was justified, based on the scope and scale of the talks. Speaking on the White House lawn, he said: “Trade with China – how big does that get? It must be the biggest deal in history.”
The race to head the World Bank opened with the US candidate already known. Other countries must stand up and be counted
With characteristic lack of restraint, the Trump administration last week jumped the gun on the World Bank presidential election process by naming David Malpass as its preferred candidate to succeed Jim Yong Kim.
The formal nomination process, which did not begin until the following day, is based on selection principles agreed in 2011 that put the emphasis on an “open, merit-based and transparent” appointment. It is high time those principles were put in practice.