UK can expect year of stagnation after narrowest of escapes from recession

Marginal expansions and contractions in 2023 will do little to solve a lack of investment and export shortfall

It was a recession in all but name: that is the conclusion of many economists who argue that while the official data shows the UK economy stood still in the last three months of 2022 rather than contracting, it is still in bad shape.

To be precise, the economy actually expanded by 0.01% in the fourth quarter, an increase so statistically insignificant that it is rounded down to zero. Had Britain not added just £77m to its £2.2tn gross domestic product (GDP) then it would have fallen into a technical recession, characterised by two consecutive quarters of negative growth.

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Australian and Chinese trade ministers meet for first time in three years

Don Farrell will fly to Beijing in the ‘near future’ amid a thawing of diplomatic relations with Australia’s largest trading partner

The Australian trade minister, Don Farrell, will fly to Beijing “in the near future” after attending the first meeting between an Australian trade minister and a Chinese commerce minister in three years.

Farrell, who was in Canberra for the resumption of parliament, met virtually with his counterpart, Wang Wentao, for about 90 minutes on Monday.

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UK will be 15 years late in hitting £1tn annual export target, figures show

Exclusive: Forecasts predict exports will fall to £707bn next year and target will not be reached until 2035

Ministers have been accused of leaving a “record of failure and broken promises” as internal forecasts show Britain will be 15 years late in achieving its £1tn annual export target after being hit by Brexit.

Projections from the Department for International Trade (DIT) show the value of UK exports will not reach £1tn until 2035, based on current trends, with the total due to fall to £707bn next year.

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Indian leather companies accused of enabling Russia’s war effort

Soldiers’ boots are made from imported Indian leather as country’s trade with Russia soars by 400%

Indian companies have been accused of enabling Russia’s war effort after exporting leather to Russian companies that make boots for its military in the months since the invasion of Ukraine.

Russia and India have longstanding ties and Narendra Modi’s government has not joined western countries in openly criticising Moscow over the war nor stopped Indian companies trading with Russia.

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China’s move to ease Covid travel restrictions lifts hopes for global economy

Analysts says lifting of many rules may soften impact of higher interest rates and unblock supply chains in 2023

China’s decision to ease rules on travel in and out of the country, the world’s second-largest economy, has offered investors hope that it could soften the toll from higher interest rates on global stock markets and unblock supply chains amid a dark outlook for 2023.

Chinese authorities said late on Monday that inbound travellers would not have to quarantine on arrival, from 8 January onward. The announcement marked the latest in a series of steps to reopen the country, which is home to vital global supply chains and 1.4 billion people.

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‘Great migrant nation’: bid to protect Australian prosecco and feta from EU bans

Trade minister Don Farrell says many producers took their food and culture to Australia from Europe and have the right to use traditional terms

The trade minister, Don Farrell, has asked his European counterparts to recognise Australia as a “great migrant nation” and not force its producers to stop using terms like prosecco and feta.

In an interview from Berlin, Farrell said he was hopeful of clinching a free trade agreement with the European Union early in the new year because he had received an “extremely positive response in all of the countries we visited”.

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Watchdog reprimands Tories over £800bn post-Brexit trade deals claim

Figure includes agreements rolled over from before leaving EU, and description of ‘new trade’ is misleading says UKSA chief

The official statistics watchdog has reprimanded the Conservatives for claiming the UK had secured £800bn in “new free trade deals” since leaving the EU, saying the figure includes deals rolled over from before Brexit.

The UK Statistics Authority (UKSA) said it had written to the Tories about the infographic, shared last month by Michael Gove among others, also warning that the party should provide sources for such figures in the future.

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G7 countries and Australia to cap price of seaborne Russian oil

Critics including Ukraine say cap of $60 per barrel is still above market value and will not hurt Russia’s war coffers

G7 countries and Australia have agreed to cap the price of Russian seaborne oil, with the aim of reducing Moscow’s income and limiting its ability to finance its war in Ukraine.

But critics, including Ukraine, say the cap of $60 a barrel is still higher than the current market price for Russian crude oil and is unlikely to affect the Kremlin’s war coffers.

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Zero-Covid policy is costing China its role as the world’s workshop

Beijing’s endless lockdowns are causing shortages for western firms such as Apple, and it may not be long before they move their supply chains elsewhere

The anti-lockdown unrest gripping China has forced the authorities in Beijing to respond by easing some restrictions in big manufacturing centres, as they map out a “new stage and mission” in the country’s deeply unpopular zero-Covid policy.

There are concerns that more freedom of movement could allow the virus to rip through a population where immunity is lower than in the west. Those health risks mean the “world’s workshop” is heading for a difficult winter, casting a shadow over the prospects for international trade.

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Decline of UK manufacturing accelerates as government ‘abandons’ sector

Amid higher costs and worker shortages, British Chambers of Commerce says Brexit is another factor

When the minor ups and downs caused by the extra bank holiday for the Queen’s funeral are stripped out of the latest GDP figures, it is clear the long decline of Britain’s industrial base has accelerated.

Protected by the government through the coronavirus pandemic, this year, factory owners say ministers have abandoned them to cope with a long recession without so much as a glance in their direction.

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We need to talk about Xi Jinping: G7’s discord over powerful trading partner

Disagreements have opened up about strategy when China is also seen as an existential threat

Western powers in the G7 group of nations are failing to coordinate their China strategies, senior western officials admit, adding that the need to do so has been given sharp impetus by Xi Jinping’s consolidation of power at this month’s Communist party congress.

The G7’s poor coordination reflects a deep disagreement, also reflected within the EU, about whether dialogue and trade with China have a future if Beijing is seen as an existential threat that requires strict strategic controls on economic ties.

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After eight rounds, is there space for further EU sanctions on Russia?

Baltic states and Poland have a long shopping list, but host of others seen as cautious of new measures

Russia-Ukraine war – latest news updates

Since Vladimir Putin launched his invasion of Ukraine, Russia has been subjected to the heaviest sanctions of any country in the world.

A fossil fuel superpower, Russia is no longer able to export coal to the European Union and will soon lose 90% of its oil sales to the bloc. In the other direction, the EU has banned the export of hundreds of goods to Russia, from hi-tech military kit and semiconductors that could aid Russia’s military, to makeup, handbags and clothes that may turn a handsome profit for Russian entrepreneurs.

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Trade from UK to EU 16% lower than if Brexit had not happened, report finds

Economic and Social Research Institute analysis found ‘substantial reduction in number of products traded’

Trade from the UK to the EU is down 16% on the levels anticipated had Brexit not happened, a new report has found.

Meanwhile trade from the EU to the UK has dropped even further, by 20%, relative to a scenario in which Brexit had not occurred, according to research published on Wednesday by the Economic and Social Research Institute.

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Hong Kong launches $3.8bn fund to attract foreign businesses back

Chief executive says territory will ‘trawl world for talent’ after lockdowns and political unrest cause brain drain

Hong Kong has unveiled a HK$30bn ($3.8bn) co-investment fund to attract overseas businesses back to the city after an exodus of talent prompted by strict lockdowns and a tumultuous political climate.

A raft of measures to address the brain drain were announced by Hong Kong’s chief executive, John Lee, in his first policy address on Wednesday – although his plans have largely failed to reassure investors.

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Biden administration angered by Opec+ oil output cut

Senior figures see decision as a slight on the US and a sign that the oil producers club is aligning with Russia

The Biden administration and its supporters have reacted angrily to the Opec+ decision to cut oil production, seeing it as a rebuff to the US president’s efforts to improve relations with Saudi Arabia.

The White House made clear that it viewed the decision by the oil production cartel, in which the plus sign represents the inclusion of Russia, to reduce daily production by 2m barrels, as a geopolitical move, and a slight to Biden who is seeking to cut Russian revenues and keep the petrol price down before November’s congressional elections.

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The grey Zara market: how ‘parallel imports’ give comfort to Russian consumers

Western brands that pulled out are still on sale, due to legal changes that have fuelled entrepreneurship

Aleksandr Gorbunov, a property investor from the Siberian city Krasnoyarsk, had a simple solution when Zara, the Spanish clothing giant, closed its stores in Russia over the invasion of Ukraine: import it himself.

“The idea to start selling Zara came from my wife, who said she really wanted the clothes to return,” said Gorbunov, who said he was opening a store called Panika (panic) on Friday that deals exclusively in Zara and Zara Home products.

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Scottish salmon industry urges ministers to act over Dover delays

Action urged over Brexit-related delays of up to 48 hours caused by queues on the UK side of Channel

The Scottish salmon industry has called on ministers to urgently intervene to stop Brexit-related delays to the transportation of fresh fish to France.

It comes after the Brexit opportunities minister, Jacob Rees-Mogg, admitted he was wrong to say there would be no delays at the port of Dover caused by the UK leaving the EU.

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Sunak ruse aims to outmanoeuvre Truss over China

Analysis: claims by ex-chancellor about Foreign Office weakness towards Beijing look like an attempt to head off a similar attack on him

Rishi Sunak’s pre-emptive strike attacking Liz Truss over alleged Foreign Office pusillanimity towards China looks to have been a daring attempt to fend off an imminent assault from his Tory leadership rival.

But it locks the contestants into a potentially uncontrollable dogfight as they seek to prove their credentials as the truer enemy of authoritarianism.

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Ukraine and Russia sign UN-backed deal to restart grain exports

Shipping of millions of tonnes from blockaded Black Sea ports could avert global food crisis

Ukraine and Russia have signed a UN-backed deal to allow the export of millions of tonnes of grain from blockaded Black Sea ports, potentially averting the threat of a catastrophic global food crisis.

A signing ceremony at Dolmabahçe Palace in Istanbul was attended by the UN secretary general, António Guterres, and Recep Tayyip Erdoğan, Turkey’s president, who had played a key role during months of tense negotiations.

A coalition of Turkish, Ukrainian and UN staff will monitor the loading of grain on to vessels in Ukrainian ports before navigating a pre-planned route through the Black Sea, which remains heavily mined by Ukrainian and Russian forces.

Ukrainian pilot vessels will guide commercial vessels transporting the grain in order to navigate the mined areas around the coastline using a map of safe channels provided by the Ukrainian side.

The vessels will then cross the Black Sea towards Turkey’s Bosphorus strait while being closely monitored by a joint coordination centre in Istanbul, containing representatives from the UN, Ukraine, Russia and Turkey.

Ships entering Ukraine will be inspected under the supervision of the same joint coordination centre to ensure they are not carrying weapons or items that could be used to attack the Ukrainian side.

The Russian and Ukrainian sides have agreed to withhold attacks on any of the commercial vessels or ports engaged in the initiative to transport vital grain, while UN and Turkish monitors will be present in Ukrainian ports in order to demarcate areas protected by the accord.

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Concerns that India is ‘back door’ into Europe for Russian oil

Volume of Russian crude bought and then exported by India suggests some of it may end up in European petrol stations

The huge blue and red hull of the SCF Primorye came into port at Vadinar, western Gujarat, India, earlier this month. The 84,000-tonne oil tanker, built in 2009 and sailing under the Liberian flag, had arrived from the port at Ust-Luga, a settlement in Russia near the border with Estonia.

Until 2017, the Vadinar oil refinery was controlled by Essar – the Indian owner of the Stanlow refinery in Ellesmere Port. Since then a consortium including the sanctioned Russian state-owned oil firm Rosneft and the commodities trader Trafigura, which holds a 24.5% stake, have owned Nayara Energy, which runs the refinery.

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