Category Archives: Global economy

Key ‘Bidenomics’ architect calls for spending ‘race to the top’ on green tech

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Biden adviser Heather Boushey urges UK and Europe to increase climate friendly investment to reboot growth

Governments around the world must drastically increase public investment in green technologies to combat global heating and drive sustainable economic growth, a top adviser to President Joe Biden has said.

Heather Boushey, a member of the White House council of economic advisers, said countries including the UK needed to ramp up green investment to reboot economic growth, boost energy security, and protect against future inflation shocks.

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Rishi Sunak to urge Narendra Modi to take stronger stance on Russia

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Two prime ministers to meet before G20 summit as India continues to import Russian oil and weapons

Rishi Sunak will use a meeting with Narendra Modi in Delhi to push the Indian prime minister to take a tougher stance towards Russia, Downing Street has said.

The two prime ministers will meet this weekend before the G20 summit in the Indian capital, where Russia’s invasion of Ukraine will be discussed in front of the Russian foreign minister, Sergei Lavrov. Vladimir Putin, the Russian president, told Modi a week ago he would not attend.

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Global economic fears deepen as service sector dips in China and Europe

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Fresh signs of weakness in Chinese economy and weak UK and eurozone data spook investors

Fears about the health of the global economy have intensified following downbeat news about service sector activity in China, the eurozone and the UK.

Share prices fell in Asia and the pound dropped to a 12-week low against the US dollar after fresh signs of weakness in China triggered speculation that its post-lockdown recovery was running out of steam.

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Rishi Sunak rules out quick-fix trade deal with India

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Exclusive: Sources believe deal will not be struck before meeting with Narendra Modi at G20 summit

Rishi Sunak has ruled out a quick-fix trade deal with India, making it impossible to get an agreement over the line in time for this week’s G20 summit in Delhi – and possibly even by next year’s elections.

Multiple sources close to the negotiations told the Guardian the prime minister has rejected the idea of an “early harvest” deal, which could have lowered tariffs on goods such as whisky but would not have dealt with trickier subjects such as professional services.

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UK solar could be ‘dumping ground’ for products of Chinese forced labour, ministers warned

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Energy bill amendment requires large solar energy projects to prove supply chain free of slave labour

The UK risks becoming a dumping ground for the products of forced labour from Xinjiang province in China if it rejects reforms proposed by members of the foreign affairs select committee with cross-party support, ministers have been warned.

An amendment to the energy bill, due to be debated on Tuesday, would require solar energy companies to prove that their supply chains are free of slave labour. The Xinjiang region is the source of 35%-40% of the world’s solar-grade polysilicon, the key raw material in the solar photovoltaic supply chain.

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Russia’s central bank hikes interest rates by 3.5 percentage points as rouble falls

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Emergency decision is intended to halt slide after currency dropped to weakest point in almost 17 months

Russia’s central bank has hiked interest rates by 3.5 percentage points in an emergency move aimed at halting the rouble’s recent slide, after it fell to its weakest point in almost 17 months.

The decision to raise the key rate from 8.5% to 12% was announced after an extraordinary meeting of the bank’s board of directors, called after the rouble plunged past the psychologically key level of 100 to the dollar on Monday morning.

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In previous downturns the world turned to China as an engine of growth – this time that driver may not be there

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What might Chinese deflation mean for interest rates, commodity prices and even EV exports outside China?

When Australia’s central bank released its quarterly economic update last week, China’s “uncertain” economic outlook topped a list of domestic worries for Australia.

The International Monetary Fund too singled out China in its latest world economic outlook as among the “downside” tilts to its balance of risks.

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UK interest rates need to stay higher for longer to beat inflation, says IMF

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US Fed will also have to raise rates more aggressively than forecast, says Washington-based body

Interest rates in the UK will need to stay higher for longer than previously forecast in order to tackle stubbornly high inflation, the International Monetary Fund has warned.

The IMF’s regular update on the state of the global economy singled out the US Federal Reserve and the Bank of England as two central banks that will need to raise official borrowing costs more aggressively than it assumed only three months ago.

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Eurozone sinks into recession as cost of living crisis takes toll

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GDP shrank 0.1% in first quarter of 2023 and final three months of 2022 after revisions to earlier estimates

The eurozone slipped into recession in the first three months of the year, after official figures were revised to show the bloc’s economy shrank as the rising cost of living weighed on consumer spending.

Figures from Eurostat, the EU’s statistical agency, showed gross domestic product (GDP) fell by 0.1% in the first quarter of 2023 and the final three months of 2022 after revisions to earlier estimates. A technical recession is generally defined as two consecutive quarters of negative growth.

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Sunak to urge G7 support for collective action against ‘economic coercion’

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Leaders expected to form council that will discuss response if states such as Russia and China boycott trade for political reasons

The UK and other G7 countries are planning collective action against Russia and China if they threaten trade boycotts for political reasons, announcing a new body to deal with “economic coercion”.

Rishi Sunak will urge “bold and pragmatic collective action” against hostile states that stop trading with other countries when they disagree with their geopolitical decisions.

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Cyprus handed 800-page US dossier on Russia sanctions breaches

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Report details how local people and firms helped Alisher Usmanov’s conceal immense wealth

Cyprus has received an 800-page dossier from the US government detailing sanctions breaches by local individuals and entities that are alleged to have enabled the Russian billionaire, Alisher Usmanov, to conceal his immense wealth.

As the island’s leader Nikos Christodoulides vowed to push ahead with the prosecution of law and audit firms that had aided the oligarch, Washington released documents that amounted to a toolkit to facilitate the process. At least two other dossiers are expected to follow.

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If China invaded Taiwan it would destroy world trade, says James Cleverly

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UK foreign secretary warns a war across Taiwan strait and likely destruction of semiconductor industry would have global effects

A Chinese invasion of Taiwan would destroy world trade, and distance would offer no protection to the inevitable catastrophic blow to the global economy, the UK’s foreign secretary, James Cleverly, warned in a set piece speech on Britain’s relations with Beijing.

In remarks that differ from French president Emmanuel Macron’s attempts to distance Europe from any potential US involvement in a future conflict over Taiwan, and which firmly support continued if guarded engagement with Beijing, Cleverly said “no country could shield itself from the repercussions of a war in Taiwan”.

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India and Russia in ‘advanced talks’ over free trade agreement

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Deal would build closer economic ties as most western states push to isolate Moscow over Ukraine

India and Russia have entered “advanced negotiations” over a free trade agreement that aims to build closer economic ties as most western governments push to isolate Moscow over the war in Ukraine.

In a development likely to add to tensions in Washington, London and EU capitals, Russia and India’s trade ministers said on Monday the two countries were in talks to strike a free trade deal.

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James Cleverly in Japan for G7 as UK tilts towards Pacific post-Brexit

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Foreign secretary says ‘free and open Indo-Pacific’ is ‘critical to UK’ and releases manga-style cartoons to mark his visit

James Cleverly has arrived in Japan for a G7 foreign ministers’ summit to promote a “free and open” Indo-Pacific, as the UK government steps up its focus on the region after Brexit.

The foreign secretary and his counterparts from countries including the US and France will hold high-level talks on closer security and defence ties in the face of China’s growing assertiveness in the Pacific.

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Macron arrives in China hoping to talk Xi into changing stance on Ukraine

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French leader sees Beijing as possible ‘gamechanger’ and will also discuss European trade on three-day visit

Emmanuel Macron has arrived in China for a three-day state visit during which he hopes to dissuade Xi Jinping from supporting Russia’s invasion of Ukraine while also developing European trade ties with Beijing.

Shortly after arriving in the Chinese capital, Macron said he wanted to push back against the idea that there was an “inescapable spiral of mounting tensions” between China and the west.

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Pacific trade deal is more useful to Joe Biden than it is to the UK’s economy

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Hailed by Tory MPs as a Brexit benefit, CPTPP membership actually turns the UK into a willing pawn in Washington’s geopolitical game

Tory MPs hailed the UK’s entry last week into the Indo-Pacific trading bloc as a major step on the road to re-establishing Britain as a pioneer of free trade.

It was a coup for Rishi Sunak, said David Jones, the deputy chairman of the European Research Group of Tory Eurosceptics, who was excited to be aligned with “some of the most dynamic economies in the world”.

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China spent $240bn on belt and road bailouts from 2008 to 2021, study finds

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Rise in emergency financing for other countries since 2016 correlates with drop in infrastructure lending

China spent $240bn (£195bn) bailing out countries struggling under their belt and road initiative debts between 2008 and 2021, new data shows.

Research found that Chinese state-backed lenders released bailout funds to 22 countries, including Argentina, Pakistan, Sri Lanka and Ukraine. Almost 80% of the emergency rescue lending was issued after 2016, reaching more than $40bn in 2021.

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UK and US shares climb as banks and ministers aim to calm Credit Suisse fears

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FTSE 100 rises and European banking shares are up after early jitters over what UBS takeover deal means for bondholders

Stocks climbed on Monday in London and New York after central bankers and politicians sought to soothe jitters triggered by the emergency rescue of Credit Suisse during the weekend.

Central banks in the UK and eurozone issued statements aimed at reassuring investors that – unlike the controversial approach taken by the Swiss authorities in the Credit Suisse deal – their jurisdictions would follow a hierarchy in which equity holders would lose out before bond holders.

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New Brexit trading rules could take more than two years to bed in fully

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No 10 says UK is giving firms in Northern Ireland time to prepare with phased introduction

The new Brexit trading arrangements in Rishi Sunak’s revised Northern Ireland protocol could take more than two years to be fully implemented, government sources have confirmed.

Businesses in Northern Ireland say they expect a mass educational campaign to be launched across the country by HMRC and other government departments to help them put the deal announced in Windsor last Monday into operation if it is approved by parliament.

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Pakistan’s fresh £580m loan from China intensifies debt burden fears

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Loan is on top of £25bn that cash-strapped Islamabad already owes Beijing and Chinese commercial banks

China has agreed to loan Pakistan $700m (£580m) to help it weather its worst economic crisis in a generation, in a development that will intensify concern among western countries about cash-strapped Islamabad’s debt burden to Beijing.

The loan comes on top of $30bn (£25bn) that Pakistan already owes China and Chinese commercial banks. Securing the financing will help to unlock bailout cash from the International Monetary Fund (IMF).

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