Category Archives: Global economy

China unveils 10tn yuan support for debt-stricken local government

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Cash stops short of hoped-for ‘bazooka option’, with critics calling it ‘an accounting exercise’ that will not bolster growth

China has announced 10tn yuan in debt support for local governments and other economic measures, but stopped short of the “bazooka” stimulus package that many analysts had expected.

The fiscal package included raising debt ceilings for local governments by 6tn yuan (£646bn) over three years, so they could replace hidden debt, which authorities said stood at 14.3tn yuan by the end of 2023.

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Post-Brexit border scheme to simplify trade put on pause again

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Single Trade Window designed to reduce friction on imports and exports will be halted until at least 2026 amid cost fears

A key part of the UK’s post-Brexit border strategy has been put on pause for more than a year amid government concerns over the cost of implementing the scheme.

The introduction of the Single Trade Window (STW), which is designed to reduce friction for traders moving goods in and out of Britain, had already been delayed from late October to January next year, but will now be halted until at least 2026.

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US cancels $1.1bn of Somalia’s debt in ‘historic’ financial agreement

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Commitment by Mogadishu’s largest single lender is latest in series of deals to forgive ‘unsustainable’ $4.5bn debt

Somalia has announced that more than $1.1bn (£860m) of outstanding loans will be cancelled by the US, a sum representing about a quarter of the country’s remaining debt.

The announcement is the latest in a series of agreements in which Somalia’s creditors have committed to forgiving its debt obligations.

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Trump tariffs would halve UK growth and push up prices, says thinktank

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NIESR warns British economy would be one of the worst affected by protectionist policies

UK growth is likely to be halved by Donald Trump’s victory in the US presidential race if goes on to impose the swingeing new tariffs he has threatened, a leading thinktank has warned.

The National Institute of Economic and Social Research (NIESR) said the protectionist measures planned by the Republican challenger for the White House would result in weaker activity, rising inflation and higher interest rates from the Bank of England.

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Petrol and food prices will fall thanks to oil glut, says World Bank

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Downward trend in oil price from higher production, falling demand in China and clean energy to continue

Petrol and food prices will fall over the next two years thanks to a glut in oil production, the World Bank has said, offering hope to consumers that the cost pressures of the past three years could start to ease.

Its analysis found that this year’s downward trend in the oil price resulting from increased production, falling demand in China and the transition to clean energy is set to continue even if the conflict in the Middle East worsens.

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IMF warns Trump trade tariffs could dent global economy as it upgrades UK outlook

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New report upgrades outlook for UK economy with growth now forecast at 1.1% rather than 0.7%

The International Monetary Fund has warned the trade tariffs favoured by US presidential candidate Donald Trump could hurt global growth, as it upgraded its forecast for the UK economy.

The Washington-based organisation said tariffs trigger tit-for-tat trade wars that impoverish the economies involved in the dispute and the wider global economy.

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Chinese stocks suffer worst fall in 27 years over growth concerns

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Investors disappointed after hoped-for policy plans by Beijing to stimulate economy failed to materialise

Chinese stocks have suffered their worst fall in 27 years after efforts by Beijing to stimulate the world’s second-largest economy disappointed investors.

Stock markets in Asia fell sharply after China’s top economic planning authority failed to announce further measures to improve flagging growth.

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UK economy to grow faster than Japan, Italy and Germany this year, says OECD

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Forecast upgrades UK to joint second after US but it is still expected to have highest inflation among G7 countries

The global economy is “turning a corner”, according to the Organisation for Economic Cooperation and Development, which has upgraded the UK’s growth forecast for this year to faster than that of Japan, Italy and Germany.

The OECD’s latest outlook ranked Britain joint second among the G7 developed countries in its latest outlook for the world economy. However, the UK is still expected to have the highest inflation in the group.

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IMF plan to visit Russia to assess economy prompts dismay across Europe

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Protest letter sent to fund’s head over move to send staff to Moscow for first review since invasion of Ukraine

The International Monetary Fund (IMF) will send staff to Moscow next week to review the Russian economy for the first time since the invasion of Ukraine, in a move that has prompted anger and dismay across European capitals.

Officials of the Washington-based organisation will travel to the Russian capital and meet “stakeholders” before publishing an assessment of the economy and providing recommendations about how the Kremlin might improve its economic handling and tackle issues such as the climate crisis.

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Government to seek global trade deals for UK at expense of formal EU re-entry

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Business secretary Jonathan Reynolds says joining Asia-Pacific CPTPP bloc is a ‘real win’ for exporters, even though it will preclude the UK from EU membership

The business and trade secretary, Jonathan Reynolds, has signalled a new twin-track approach to UK trade policy, in which the Labour government will pursue closer ties with the European Union while at the same time seeking new global partnerships further afield.

Writing for the Observer online, Reynolds welcomes the UK’s imminent entry into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) as a “real win” for British exporters.

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China begins anti-subsidy investigation into European dairy imports

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Inquiry into eight EU countries is latest chapter in hostility between Beijing and EU over trade

Chinese authorities have launched an anti-subsidy investigation into European dairy imports, in the latest sign of escalating trade tensions between Brussels and Beijing.

The announcement from China’s commerce ministry on Wednesday came a day after the European Commission revealed revised duties on Chinese electric vehicles as part of its examination into what it viewed as artificially cheap cars that posed a threat to jobs in Europe’s motor industry.

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Wood Group suitor pulls out of takeover, blaming market turmoil

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Shares in FTSE 250 company slump 37% in early trading after Dubai-based Sidara cites geopolitical risk

The share price of the British oil services company John Wood Group has plunged by more than a third after a Dubai-based suitor pulled out of a purchase amid global market turmoil.

In a statement to the stock market on Monday the engineering company Sidara said it had pulled out of a bid for Wood “in light of rising geopolitical risks and financial market uncertainty”.

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Shares in New York and London tumble on fears of US recession

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FTSE 100 on track for its lowest close since April and Japan’s Nikkei suffers biggest fall since crash of 1987

Shares on Wall Street and in London have fallen heavily amid a global stock market rout triggered by fears of a recession in the US.

The tech-focused Nasdaq index dropped by 6% as trading in New York opened on Monday, while the broader S&P 500 index fell by 4.2% in a sell-off triggered by weak US jobs data. The Dow Jones industrial average lost more than 1,100 points, a 2.8% decline.

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Large English vineyards mark boom year as output and investment soars

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Though tiny compared with rivals, English wine trade is thriving as climate crisis fuels flood of new capital from investors

The largest English vineyards increased their revenues by 15% last year, as wine investors respond to the climate crisis by planting more vines.

While the UK still languishes well down the list of the largest wine-producing nations, below countries such as Uzbekistan and Tunisia, the industry’s output has soared in recent years, rising by 77% last year to 161,960 hectolitres, equivalent to 21.6m bottles.

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UK food industry says lack of testing capacity forcing imports back to EU for checks

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Trade bodies blame lack of lab facilities at Brexit border posts for longer delays and shorter shelf life of food

Imported food coming into the UK through Brexit border posts is being sent back to Europe to be tested due to a lack of laboratory capacity in Britain, food bodies have said.

The SPS Certification Working Group, which represents 30 trade bodies covering £100bn worth of the UK’s food supply, has written to the government warning that members are being advised that some samples of imported foods are being sent to countries such as Germany to be tested before they can be released at the border.

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World Bank warns 108 countries risk being stuck in ‘middle-income trap’

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Too many nations, including China and India, are relying on outmoded strategies to become advanced economies, says report

More than 100 countries – including China, India, Brazil and South Africa – risk becoming stuck in a “middle-income trap” unless they adopt radical growth strategies for their economies, the World Bank has said.

The Washington-based development organisation said emerging market nations would struggle to close the gap on US living standards unless they relied less heavily on investment to increase growth.

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EU plan to impose import duty on cheap goods could dent Shein and Temu

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Brussels move to end tax loophole exploited by China-linked marketplaces could also dent Shein’s planned London listing

The EU is moving forward with plans to impose customs duty on cheap goods in a shift that could hit imports from online retailers and harm a hoped-for London listing by the fast-fashion seller Shein.

The potential change comes amid growing disquiet among retailers based in the UK, elsewhere in Europe, and the US about rising competition from Chinese-linked marketplaces Shein and Temu, which exploit a loophole that excludes low-value items from import duty.

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Soaring government debt could roil global financial markets, warns BIS head

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Agustín Carstens says world economy on course for ‘smooth landing’ after inflation but political turmoil poses risk

Rising government debt levels could disturb global financial markets, the head of the body that advises central banks said on Sunday before France’s high-stakes parliamentary elections.

Agustín Carstens, the general manager of the Bank for International Settlements (BIS), said the world economy was on course for a “smooth landing” from the inflation crisis, but he warned that policymakers, especially politicians, needed to be careful.

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Global wave of elections could hit UK financial system, warns Bank of England

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Central bank raises concerns over newly elected governments as more than 80 countries go to polls this year

Uncertainty caused by a global wave of elections, starting this weekend in France, risks destabilising the UK’s financial system, the Bank of England has warned.

Officials are concerned about the kind of policies that newly elected governments may enforce in large economies, including the US, where Donald Trump is vying for another term as president in the run-up to the election in November.

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Russian ties and cheap tech: G7 leaders unequivocal in criticism of China

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Concerns set out over supply of materials with military applications, and impact of subsidies on global market

China’s role in providing assistance to Russia in its war against Ukraine, and its “harmful overcapacity” in the production of cheap goods, have been targeted by G7 leaders despite misgivings from Germany.

On the second day of the annual summit, being held in Puglia under the Italian chair, the US drove home a 36-page communique that condemned Chinese subsidies for products such as solar panels and electric cars which it said were leading to “global spillovers, market distortions and harmful overcapacity … undermining our workers, industries, and economic resilience and security”.

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