Lloyd’s moves to cancel insurance cover of Russian firms hit by sanctions

Action comes as Lloyd’s of London returns to profit but warns Ukraine war will present ‘major claim’

Russia-Ukraine war: latest updates

Lloyd’s of London has said it is working with the UK government to implement sanctions imposed over the war in Ukraine as fast as possible, including cancelling Russian firms’ insurance cover.

Announcing a swing back to an annual profit as it recovers from the pandemic, the world’s biggest insurance market warned that the war will present a “major claim” for the insurance market this year, but said it was “manageable”.

Continue reading...

Zelenskiy calls on Japan to impose trade embargo on Russian goods

The Ukrainian president thanked Japan for ‘leading the way’ in virtual address to MPs

The Ukrainian president, Volodymyr Zelenskiy, has called on Japan to increase pressure on Russia by imposing a trade embargo on Russian goods, in a virtual address to MPs in Tokyo.

Zelenskiy, who has delivered carefully tailored speeches to lawmakers in the US, UK and other countries, thanked Japan for “leading the way” among Asian countries in condemning Russia’s invasion of Ukraine and imposing sanctions.

Continue reading...

Britain and US agree on steel tariffs as hopes of broader trade deal recede

Pact ends months of tensions but talks on full free-trade agreement remain far off

The UK has struck a deal with the US to remove tariffs on British steel exports, although trade experts warned a broader trade deal between the two countries remains far off.

The agreement was struck after UK’s international trade minister, Anne-Marie Trevelyan, met her counterpart, the US commerce secretary, Gina Raimondo, on Tuesday evening in Washington.

Continue reading...

London Stock Exchange suspends trading in 27 firms with strong links to Russia

Energy and banking giants Gazprom and Sberbank plus EN+, Lukoil and Polyus among firms

The London Stock Exchange has suspended trading in 27 companies with strong links to Russia, including energy and banking giants Gazprom and Sberbank.

The LSE said it was moving to block trading in the companies, which also include EN+, Lukoil and Polyus, with immediate effect “in light of market conditions, and in order to maintain orderly markets”.

Continue reading...

Sanctions are neither new nor guaranteed to work – just look at Cuba

Analysis: Economic penalties have been meted out since Napoleon’s day but there’s little proof they achieve the desired outcome

Waging war by economic means is nothing new. Napoleon imposed an ineffective embargo on British exports in the early 19th century and during the first world war there were attempts by both sides to starve each other into submission.

But since 1945 sanctions have been used with increasing frequency as a means of trying to change either the policy stance or the regimes in targeted countries.

Continue reading...

UK and New Zealand sign free trade deal

Government claims it will boost bilateral trade by 60% but critics call its benefits ‘economically marginal’

Britain and New Zealand have signed a free trade deal, which the UK government said would boost bilateral trade by 60% by eliminating tariffs, cutting red tape and enabling freer movement of professional workers.

Most business leaders welcomed the deal, which was agreed in principle in October and follows on the heels of a similar agreement with Australia, but the National Farmers’ Union (NFU) said it would lead to unfair competition in their sector.

Continue reading...

Russia-Ukraine war latest news: Turkey will limit Russian warship access to Black Sea, says Erdoğan – live

Turkish president confirms Ankara will invoke Montreux Convention on day that rocket strikes killed ‘dozens’ in Ukrainian city of Kharkiv

Here’s a report from the Guardian’s diplomatic editor, Patrick Wintour, on how the phone has become the Ukrainian president’s most effective weapon.

In a string of phone calls from a besieged Kyiv, Ukraine’s president, Volodymyr Zelenskiy, has persuaded the west to agree to a set of sanctions against Russia that were inconceivable a week ago.

Continue reading...

Russian central bank buys up roubles to avert stock market collapse

Bank scrambles to prevent invasion of Ukraine sending Russia’s financial system into meltdown as currency hits all-time low

The Russian central bank has purchased millions of roubles to prevent the collapse of the Moscow stock exchange and prop up the currency after it plunged to an all-time low of 89.60 against the dollar.

In a scramble to prevent the invasion of Ukraine pushing Russia’s financial system into meltdown, officials in Moscow closed the stock exchange while the Bank of Russia mounted a rescue operation to put a floor under the skidding rouble.

Continue reading...

Why a swift economic victory against Russia looks unlikely

Analysis: country has positioned itself to blunt western sanctions and has a few retaliatory ones of its own

Be ready for a long haul. That was the subtext of Boris Johnson’s message to MPs as he committed to toughening up sanctions against Russia.

The warning to prepare for a “protracted struggle” was both timely and appropriate. There will be no quick knockout blow because Vladimir Putin has had time to prepare and is well dug-in.

Continue reading...

Ukraine crisis: sanctions against Russia come at a cost to the west

Analysis: The west will adopt step-by-step approach, leaving toughest sanctions as last resort

After all the tough talk of the past month, the sanctions imposed on Russia by the west are unlikely to lose Vladimir Putin much sleep. The response to Boris Johnson’s announcement that five of the less important Russian banks and three individuals would be targeted was: is that it?

The most dramatic news was Germany’s decision to halt approval of the Nord Stream 2 gas pipeline from Russia to western Europe. That will have an impact, but may end up affecting Germany more than it does Russia.

Continue reading...

The rise in global inflation – the hit to living standards across the world

Analysis: From Pakistan to the US, Australia to Germany, the cost of living is rising to new highs and causing new hardships

After decades lurking in the shadows, inflation is back. On Amazon, you can find fridge magnets printed with words spoken 40 years ago by Ronald Reagan, before the election that swept him into the White House.

“Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hit man.”

Continue reading...

EU hopes €43bn plan will fix chip shortages as supply chain crisis bites

Ursula von der Leyen says chips are ‘bedrock of our modern economies’ but the pandemic has exposed supply vulnerabilities

The European Union has announced a €43bn ($48bn) plan to overcome its dependency on Asian computer chip makers as governments and businesses around the world battle with a global supply chain crisis that experts believe could persist for much of the year.

With consumers having to wait months for cars, dishwashers and other durables thanks to chip shortages, the bloc’s plan marks one of the most significant developments yet seen as a result of the tectonic shifts in the global economy set off by the coronavirus pandemic.

In the US, Harley Davidson said its customers would have to bear the brunt of component price rises, and Starbucks said it was raising its prices for the third time since October, while FedEx’s air cargo arm was booming as businesses sought a way around bottlenecks.

In Europe, the UK’s biggest private employer, Tesco supermarket, said food inflation will hit 5% this spring on the back of tighter supply, the price of beer was rising due a “vicious cycle of costs”, and truck maker Iveco reported protracted supply chain issues on Tuesday.

In Australia, analysts at Commonwealth bank this week said Covid-induced supply chain disruptions and labour shortages continued to drive a big lift in price pressures for businesses, weakening business confidence. On the upside, small-town butchers were thriving thanks to supply shortages leaving supermarket shelves bare.

Continue reading...

‘No light at the end of the tunnel’: Americans join Hong Kong’s business exodus

Worsening Sino-US ties, strict Covid rules and the crackdown on dissent have dented the territory’s fabled allure as a business hub, say expats

In July 2018, Tara Joseph, president of the American Chamber of Commerce in Hong Kong, wrote an article in the best-known local English-language newspaper, the South China Morning Post, stressing to Americans the territory’s unique position as an Asian business hub.

“The US is forgetting the differences between Hong Kong and China. Let’s remind them,” she wrote. “Hong Kong continues to have a robust and hearty infrastructure of values, practices and institutions that could not contrast more starkly with those of the mainland system.”

Continue reading...

‘It is soul-destroying’: lorry drivers face hours stuck in queues at Dover

Emergency traffic controls triggered 20 times this year as extra Brexit controls and freight volumes cause logjams

His lorry loaded with British Airways aircraft parts, Ivo Hradilik was expecting to drive onto a ferry headed to Calais, before delivering his cargo to the outskirts of Paris.

But there’s a problem with the customs paperwork, and the 26-year-old HGV driver from the Czech Republic will have to park up near the Port of Dover while the haulage company sorts everything out.

Continue reading...

Brexit changes will add to soaring costs in 2022, warn UK manufacturers

Make UK says two-thirds of companies fear customs delays and red tape from new rules will further hamper supply chains

Manufacturers have warned that Brexit will add to soaring costs facing British industry, amid concerns that customs delays and red tape will rank among the biggest challenges for firms this year.

Make UK, the industry body representing 20,000 manufacturing firms of all sizes from across the country, said that while optimism among its members had grown, it was being undermined by the after-effects of the UK’s departure from the EU.

Continue reading...

Tesla criticised for opening showroom in Xinjiang despite human rights abuses

Elon Musk and Tesla must consider human rights in the Chinese region or risk being complicit, says Human Rights Watch

Tesla has opened a new showroom in the capital of Xinjiang, a region at the heart of years-long campaign by Chinese authorities of repression and assimilation against the Uyghur people.

Tesla announced the opening in Urumqi with a Weibo post on 31 December saying: “On the last day of 2021, we meet in Xinjiang. In 2022 let us together launch Xinjiang on its electric journey!”

Continue reading...

NI peace architect accuses Boris Johnson of ‘casual political vandalism’

Jonathan Powell says PM and Brexit ministers risking fragile peace in Northern Ireland and ‘don’t seem to care’

One of the architects of the Northern Ireland peace deal has said Boris Johnson and the former Brexit minister Lord Frost have risked “all the work” the previous generation of politicians put into the Belfast Good Friday agreement by putting their hard ideological beliefs ahead of people.

Jonathan Powell, Tony Blair’s former chief of staff and chief negotiator on Northern Ireland, said he was concerned that neither the prime minister nor the recently resigned Brexit minister seemed to understand or care about the fragility of the political settlement in Northern Ireland in 1998.

Continue reading...

From economic miracle to mirage – will China’s GDP ever overtake the US?

Analysis: issues of governance, rising debt, Covid and property market turmoil will delay Beijing’s quest to become the global economy’s No 1

“The east is rising, the west is declining”, according to the narrative propagated by the Chinese Communist party (CCP). Many outside China take its “inevitable rise” as read. On the way to becoming a “modern socialist country” by 2035, and rich, powerful, and dominant by 2049, the centenary of the People’s Republic, China wants to claim bragging rights as its GDP surpasses the United States, and project its power based on its expanding economic heft.

There is, however, a critical flaw in this narrative. China’s economy may fail to overtake the US as it succumbs to the proverbial middle-income trap. This is where the relative development progress of countries in relation to richer nations stalls, and is normally characterised by difficult economic adjustment and often by unpredictable political consequences.

Historically, China’s growth miracle has been remarkable. In the 30 years to 1990. The money GDP (the market value of goods and services produced in an economy) for China and the US in American dollar terms grew more or less in tandem at just over 6% and 8% per annum, respectively. . But in the next three decades, China’s GDP growth doubled to over 13%, while America’s halved to 4.5%. That pushed China’s GDP up from 5% of American GDP to 66%.

Yet, China’s growth spurt is now over, and the huge disparity in GDP growth has been eliminated. In the last few quarters, China’s GDP has been growing at half the rate of the US. Although that discrepancy is probably unsustainable, America’s $9tn GDP margin over China means that comparable rates of GDP growth in the future will sustain and even widen the margin. A Japanese thinktank has recently extended the date when it expects China to overtake the US, from 2029 to 2033. Deferrals like this are now a feature, and there will be more.


The issue though is less about the maths and more about why China is at a turning point.

Continue reading...

Asia’s factory workers at the sharp end of the west’s supply chain crisis

Migrant workers ate and slept in factories swarming with Covid, sealed off from outside world

For weeks, Hoang Thi Quynh* worked and slept inside a garment factory in Tien Giang province, in southern Vietnam. She would start her shift at 7.15am and then, after a day spent sewing sportswear garments, enter an empty hall of the factory complex and settle down for the night.

Each worker had a tent, set one or two metres apart, containing a foil mat, pillow, blanket and a box to store their belongings. No workers were permitted to meet anyone from outside the factory; even speaking to a visitor over the gates was forbidden.

Continue reading...

UK changes tack over Northern Ireland protocol with push for ‘interim’ deal

Brexit minister David Frost is seeking agreement on customs and imports to NI and could drop insistence on total exclusion of ECJ

The UK is to change tack in negotiations over the Northern Ireland Brexit protocol and will push for an “interim” deal to avert any further deterioration of political stability in the region.

Brexit minister David Frost is set to propose a new approach based on a “staged solution” with a deal on customs declarations and physical checks on goods a priority to address the immediate impact on people’s lives and livelihoods.

Continue reading...