Category Archives: Global economy

Geopolitical tensions and AI dominate start of World Economic Forum

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Ukraine, Middle East and Taiwan overshadow annual meeting at Davos, with artificial intelligence also high on agenda

Growing concern that heightened geopolitical tension could damage an already shaky global economy has dominated the start of the annual gathering of the world’s business and political elite in Davos, Switzerland.

Three potential flash points – Ukraine, the Middle East and Taiwan – threatened to overshadow the meeting of the World Economic Forum (WEF) aimed at rebuilding trust after the series of setbacks suffered in the past four years, including war, the Covid-19 pandemic and the cost of living crisis.

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Oil prices hit $80 a barrel as fears grow over Red Sea disruption to trade

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Experts warn of economic impact of sustained shipping attacks and Middle East tensions

Oil prices have hit $80 (£62.83) as fears grew about the economic impact of disruption to international trade through the Red Sea and escalating tensions in the Middle East.

Raising concerns about a possible inflation shock for the world economy, Brent crude prices jumped by about 4% to a high of $80.75 a barrel on Friday, while US West Texas Intermediate crude also increased after US and UK airstrikes against Houthi rebel sites in Yemen.

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Why is Germany’s economy struggling – and can the government fix it?

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As railway staff, lorry drivers, farmers and others threaten to strike, we examine the challenges the country faces

Railway staff, lorry drivers and farmers are among those threatening strike action across Germany from Monday in nationwide protests over grievances ranging from pay and conditions to cuts in agricultural subsidies and higher road tolls.

Long Europe’s powerhouse, Germany is struggling with a potent mix of short-term and deeper structural problems that – along with a divided and seemingly ineffectual government – have prompted economists to talk of the “sick man of Europe”.

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Global economy faces period of prolonged weakness, UN warns

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Secretary general urges countries to increase investment to avoid falling behind on climate action and sustainable development

The world faces a protracted period of weak economic growth that will undermine progress on sustainable development, the UN has warned, as it urged countries to raise investment to tackle the climate emergency.

Its annual assessment of the state of the global economy presents a sombre outlook for growth as countries grapple with the impact of higher borrowing costs, geopolitical tensions and heightened risk of climate disasters.

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UK and Switzerland agree to deepen ties between City and Swiss banking system

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Treasury says post-Brexit tie-up to be signed on Thursday will ease cross-border market access for financial services

The UK and Switzerland will agree to forge closer links on Thursday in a post-Brexit accord that aims to deepen ties between the City and the Swiss banking system.

In a move that brings Europe’s largest financial centres closer together, the mutual recognition agreement will be signed on Thursday by the chancellor, Jeremy Hunt, during a visit to Berne.

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EU set to suspend Brexit tariffs on EVs for three years in major boost for car industry

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Commission moves to delay 10% sales charge after intense lobbying by EU and UK carmakers

The European Commission looks set to propose a three-year delay to a 10% tariff on sales of electric vehicles between the EU and the UK, in a major boost for car industries across Europe.

Duties were due to kick in on 1 January 2024 but all the major carmakers in the UK and Europe including BMW, Volkswagen and Stellantis have been lobbying for a temporary reprieve.

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EU expected to issue veiled warning to China over supply of cut-cost goods

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European Commission chief Ursula von der Leyen to meet Chinese president Xi Jinping at summit on Thursday

The EU is to tell China that its €400bn (£343bn) trade deficit is not sustainable long term amid fears that it will flood the bloc with subsidised electric cars, solar panels and medical devices, threatening European manufacturing and jobs.

Ursula von der Leyen, the European Commission chief, and Charles Michel, the European Council president, will meet Xi Jinping at a summit on Thursday, the second of its kind this year.

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Moody’s cuts China credit outlook to negative as economy slows

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Rating agency says Beijing may need to bail out local governments as property sector collapses

China’s ability to repay its government borrowing has been downgraded by the credit rating agency Moody’s, which said the ripple effects from a crisis in the property sector would undermine efforts to revive its flagging economy.

Moody’s warned that Beijing would need to bail out local and regional governments and state-owned enterprises that were struggling with rising debts, hampering efforts to boost investment and growth.

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Central banks ‘risk tipping UK and other developed countries into recession’

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Stance on inflation poses threat to ‘soft landing’ forecast for global economy, says OECD

Continued tough action by central banks to tackle stubborn inflation risks tipping Britain and other developed countries into recession next year, the west’s leading economic thinktank has warned.

The Organisation for Economic Co-operation and Development (OECD) said the chances of policymakers getting it wrong were “pretty high” and posed a threat to its central “soft landing” forecast for the global economy.

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EU agrees to ban exports of waste plastic to poor countries

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Rules, still subject to formal approval, stop exports to non-OECD countries and limit them elsewhere

The EU has struck a deal to stop ships of waste plastic landing in ports of poor countries.

European lawmakers and member states agreed on Friday to ban exports of plastic rubbish to countries outside the OECD group of mostly rich countries from the middle of 2026. The deal comes as diplomats meet in Nairobi, Kenya, to hammer out a global treaty on plastic pollution.

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Middle East war could spark global recession, say Wall Street experts

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Fear adds to Russia-Ukraine conflict risk and increases ‘probability of European and of US recession’

A global recession could be triggered by the conflict in the Middle East as the humanitarian crisis compounds the challenges facing an already precarious world economy, two of Wall Street’s biggest names warned this weekend.

Larry Fink, chief executive of the world’s largest asset manager, BlackRock, said a combination of the Hamas atrocities of 7 October, Israel’s resultant attack on Gaza and Russia’s invasion of Ukraine last year had pushed the world “almost to a whole new future”.

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Maersk to cut 10,000 jobs as shipping demand drops

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Danish company has axed 6,500 of those roles already, with global economic slowdown taking toll

One of the world’s largest shipping companies, Møller-Maersk, is cutting 10,000 jobs because of a drop in demand triggered by the global economic slowdown.

The Danish company said it had already started cutting staff but was planning on “intensifying” cost-saving measures in order to safeguard its financial performance as price forecasts worsened.

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Young Europeans more likely to quit driving and have fewer children to save planet

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Exclusive: Poll shows young people willing to make big lifestyle changes but baulk at smaller gestures

They are willing to have smaller families, stop using cars and – albeit in smaller numbers – go vegan for the planet, but abandoning single-use plastics and growing a few more plants could be a step too far.

Across Europe, according to a seven-country survey, it seems young people are more willing than older generations to make big lifestyle changes that would help combat the climate crisis – but are less convinced by smaller gestures.

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China launches tax investigations into Apple iPhone maker Foxconn

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Tax audits and land use inquiries follow company founder announcing run for Taiwan presidency

China’s tax authorities have launched multiple investigations into the company that makes the iPhone, months after its billionaire founder announced he would run in Taiwan’s presidential elections.

Foxconn faces tax audits of its operations in China, as well as investigations into land use in two Chinese provinces, according to reports by local media.

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Africa’s ‘optimist-in-chief’ on the continent’s renaissance: ‘Don’t just believe me, believe the data’

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In an exclusive interview, Akinwumi Adesina, head of the African Development Bank, says the outlook is good for a continent with the workers of the future and the best investment opportunities

Africa holds the future workforce for the ageing economies of the west, according to one of the continent’s leading financial figures, who also said it was time to ditch the myths around corruption and risk.

In an exclusive interview before this weekend’s World Bank meetings in Morocco, Akinwumi Adesina said there was a resurgence of belief in Africa’s economic prospects and attacked negative stereotyping, adding that there was “every reason to be optimistic”.

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IMF clings to a hopeful agenda as crisis follows crisis

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At the fund’s annual meeting this week in Morocco, ambitions for climate and debt relief may be overwhelmed by events – again

Last week’s turmoil in the global bond markets will be playing on the minds of finance ministers and central bank governors when they gather in Marrakech this week for the annual meetings of the International Monetary Fund and the World Bank.

After the triple shocks of the Covid pandemic, the war in Ukraine and the surge in inflation, the mood may be less febrile than it was a year ago, but few if any of those travelling to Morocco – which suffered a devastating earthquake last month – would dare say that the crisis era is over. Most will be wondering what might go wrong next.

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Bond market sell-off sends UK long-term borrowing cost to 25-year high

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Rate tops level last seen after Liz Truss mini-budget as fears of global inflation and US political instability spook markets

Britain’s long-term cost of borrowing has hit its highest level since 1998, as political instability in the US and fears of sustained high levels of inflation triggered a sell-off in global bond markets.

The yield, or interest rate, on 30-year UK government bonds hit 5.115% early on Wednesday, according to the financial data provider Refinitiv.

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Investigation launched into killings and evictions on World Bank tourism project

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Tanzania government blamed for violence against villagers in national park, while thousands more people face losing their homes

The World Bank is investigating allegations of killings, rape and forced evictions made by villagers living near the site of a proposed tourism project it is funding in Tanzania.

The bank has been accused of “enabling” alleged violence by the Tanzanian government to make way for a $150m (£123m) project ministers say will protect the environment and attract more tourists to Ruaha national park.

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Costs, delays and labour shortages threaten the Osaka world expo

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Japan hopes the fair in 2025 will reconnect it with the global community after Covid but calls are growing to delay or scrap the event

In the distance, beyond the clouds of sand kicked up by a coastal wind and passing lorries, the centrepiece of Osaka’s plan to “reconnect the world” is finally taking shape.

When completed, huge sections of timber will form an enormous walkway encircling a “forest of tranquillity” and pavilions showcasing the history, culture and technology of more than 130 countries, with the host, Japan, at its heart.

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UK manufacturers cut hiring plans amid ‘sharp slowdown’, survey finds

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Firms preparing for difficult year as ‘potent cocktail’ of difficulties takes hold, says industry lobby group

UK manufacturers are cutting their recruitment plans after being hit by a slowdown in orders as a downturn looms, a new survey shows.

Britain’s manufacturers are “battening down the hatches” amid a sharp drop in activity, according to the latest quarterly data from Make UK, which represents manufacturers, and the business advisory firm BDO.

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