Economics

US woes weigh on markets ahead of UK retail sales – business live | Business – Business Article

RBS delivered a stellar set of numbers and a forecast-beating dividend payout to investors, but Brexit and other factors mean it will fall short on its cost cutting target. On the whole this was just what investors have been waiting for. Profits rose to £1.6bn, ahead of the consensus for around £1.4bn and more than double the £752m a year ago. Shares could well continue their 2019 ascent today, although the prospect of the government selling down its stake will…

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Phew, the Bank would deploy common sense on no-deal Brexit | Nils Pratley | Politics – Business Article

A no-deal Brexit, in economic terms, would be a trip into the unknown and would very likely involve a severe shock. Even the sober sub-set of Brexit promoters concedes the latter short-term point. But at least one likely outcome is becoming clearer: the Bank of England would not make things worse by cranking up interest rates. The idea that it might was a strange notion entertained by Threadneedle Street last November as it sketched various scenarios for the UK’s departure…

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Germany narrowly avoids recession after stagnating in last quarter – business live | Business – Business Article

2.44am EST 02:44 Why has Germany’s economy slowed? Germany used to be the powerhouse of the eurozone economy, but a cocktail of blows from home and abroad have left it nursing a bad hangover. 1) The global slowdown. The world economy has come off the boil in recent months, partly due to Donald Trump’s trade war. That means less investment, so lower demand for machinery produced by Germany’s industrial heartland. China, in particular, has been cutting back on imports as…

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Brexit: UK has rolled over just £16bn out of £117bn trade deals | Business – Business Article

The government’s push to roll over EU trade deals from which the UK currently benefits has yielded agreements covering just £16bn of the near-£117bn of British trade with the countries involved. Despite frenetic efforts by ministers to ensure the continuity of international trade after the UK leaves the EU on 29 March, the trade secretary, Liam Fox, has so far only managed to secure deals with seven of the 69 countries that the UK currently trades with under preferential EU…

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MPs press Treasury to abandon ‘absurd’ inflation measure | Business – Business Article

The government is coming under intense pressure to either abandon or fix the “grossly unfair” retail prices index inflation measure, which MPs say is penalising students and rail passengers. In a rare combined letter from parliamentarians in the House of Commons and the House of Lords, RPI was described as “absurd” and its continued use was labelled “a ridiculous merry-go-round”. In the letter sent to the head of the UK Statistics Authority, John Pullinger, the House of Commons Treasury select…

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Markets boosted by US government shutdown deal and trade war hopes – business live | Business – Business Article

Republican Senator from Alabama Richard Shelby, who says a deal to avoid another government shutdown has been reached Photograph: Jim Lo Scalzo/EPA Good morning, and welcome to our rolling coverage of the world economy, the financial market, the eurozone and business. A burst of optimism is rippling through the markets this morning, after US lawmakers reached a tentative deal to avoid another government shutdown. Overnight, Democrats and Republicans agreed a new spending package, which includes some more money to fund…

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Hammond’s Brexit ‘dividend’ claim rejected as UK economy stalls | Politics – Business Article

Philip Hammond’s claim that Britain can reap an economic dividend from Theresa May’s Brexit deal has been flatly rejected by MPs, as official figures confirmed the UK has suffered its worst year for GDP growth since 2012. In a highly critical report, the Treasury select committee warned that the chancellor’s claims of a “deal dividend” if Britain avoided a no-deal exit lacked credibility. The criticism came after data on Monday showed the economy grew by just 0.2% in the final…

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UK GDP growth report to show economy slowing ahead of Brexit – business live | Business – Business Article

4.30am EST 04:30 UK GDP report released Newsflash: The UK economy suffered a sharp slowdown in the last quarter of 2018, only expanding by 0.2%. That’s down from 0.6% in the third quarter. More to follow… 4.25am EST 04:25 There’s just time for a reminder of GDP’s weaknesses, with this brilliant speech by Robert Kennedy more than 50 years ago: 4.16am EST 04:16 Household incomes takes £1,500 hit since EU referendum Resolution, the thinktank, has a grim statistic — UK…

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A hundred years of impatience haven’t solved economy’s structural problems | Larry Elliott | Business – Business Article

This year marks a centenary of sorts. Back in 1919, with the first world war finally over, Britain woke up to a new reality. The days of being the world’s pre-eminent economic power were in the past. In truth, the writing had been on the wall before 1914. The US and Germany had caught up with Britain before the assassination at Sarajevo and were forging ahead in the new sectors that had sprung up around the turn of the 20th…

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Financial markets seem lost in the fog of Brexit | Nils Pratley | Business – Business Article

Mark Carney could just as easily have shrugged his shoulders and declared that, like the rest of us, he hasn’t a clue how Brexit will work out. Instead, the Bank of England governor, obliged to riff on a theme when unveiling new economic forecasts, opted for “the fog of Brexit”, which amounted to much the same thing. Sadly, he couldn’t say when visibility will improve. Financial markets, too, seem baffled. The headline news that the Bank was making deep cuts…

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No-deal Brexit: UK exporters risk being locked out of world’s harbours | Business – Business Article

British exporters sending goods to far-flung destinations in the coming days risk being locked out of harbours around the world as a no-deal Brexit looms, business leaders have warned. The Confederation of British Industry, the EEF manufacturers’ lobby group and trade experts said exporters could be dispatching goods from UK ports imminently which would not arrive until after the 29 March deadline – raising the prospect of goods being stuck in ports or facing hefty additional costs in the event…

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German recession fears grow as factory orders tumble – business live | Business – Business Article

Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. Concerns over the health of the German economy are mounting this morning, after Europe’s largest economy suffered another big fall in manufacturing orders. Germany factory orders plunged by 1.6% in December, new figures released this morning show, due to weak demand from overseas. That’s much worse than the 0.3% rise which economists had expected, and follows a 0.2% decline in November.…

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UK services sector flatlines as Brexit fears slow economy | Business – Business Article

Britain’s pivotal services sector has posted its weakest performance since the immediate aftermath of the EU referendum amid growing signs that Brexit uncertainty has slowed the economy to stall speed. The latest health check of a sector that accounts for almost 80% of UK output showed services companies starting to reduce staff numbers in response to a decline in new business. After downbeat news from the manufacturing sectors, the closely watched survey of services from the Chartered Institute of Procurement…

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UK economy slumps into stagnation as Brexit uncertainty hits demand – business live | Business – Business Article

“Service sector growth ground almost to a halt in January, matching similar disappointing news in the manufacturing and construction sectors. The last three months have seen the economy slip into its weakest growth spell for six years, and indicate that GDP likely stagnated at the start of 2019 after eking out modest growth of just 0.1% in the fourth quarter. “With the exception of July 2016, when demand contracted briefly following the surprise Brexit vote, service providers suffered the largest…

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La dolce vita slips away again as Italy tumbles back into recession | Business – Business Article

Sharing his predictions on the economy less than a month ago, Luigi Di Maio, the Italian deputy prime minister, believed the country was on the cusp of an economic miracle akin to the one enjoyed in the 1960s. “During that period we built highways, now we can build digital highways,” he enthused. His comments were met with derisive laughter. There was even less to laugh about on Thursday when figures revealed that Italy, which is saddled with a public debt…

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Why record job growth in America hides a troubling reality | Business – Business Article

January marked the 100th consecutive month of job creation in the United States – a record breaking streak of job creation that has left employers scrambling to find workers and dragged the long-term unemployed back into the market. Yet even now, 20m jobs later, there are some parts of the US economy that have yet to reflect the positive image projected by the continuous job growth and low unemployment rate. “That we’ve had the unemployment rate at or below 4%…

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China manufacturing disappoints ahead of US jobs data – business live | Business – Business Article

3.30am EST 03:30 One in three UK firms plan for no-deal relocation One in three UK firms are planning to relocate some of their operations abroad in the event of a no-deal Brexit, according to a survey by the Institute of Directors. The lobby group says 29% of firms in a survey of 1,200 members had either already moved part of their business or were planning to do so in response to threat of a hard Brexit. Edwin Morgan, the…

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UK wages worth up to a third less than in 2008, study shows | Business – Business Article

Wages are still worth a third less in some parts of the country than a decade ago, according to a report. Research by the Trades Union Congress (TUC) found that the average worker has lost £11,800 in real earnings since 2008. The UK has suffered the worst real wage slump among leading economies, the union organisation said. The biggest losses have been in areas including the London borough of Redbridge, Epsom and Waverley in Surrey, Selby in North Yorkshire and…

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UK consumers shun credit cards as Brexit looms – business live | Business – Business Article

French riot police clash with Yellow Vests protesters at the Place de la Bastille Photograph: Alfred Photos/SIPA/REX/Shutterstock Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. With gloom gathering over Europe, France has given the eurozone a much-needed boost by beating growth forecasts for the last quarter. French GDP expanded by 0.3% during October-December, new figures show, crushing fears that growth could have fallen to just 0.1%. That matches France’s…

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Huawei charges reignite trade war fears; Brexit hits Hargreaves Lansdown – business live | Business – Business Article

Acting Attorney General Matthew Whitaker announcing indictments against China’s Huawei Technologies Co Ltd, several of its subsidiaries and its chief financial officer Meng Wanzhou last night Photograph: Joshua Roberts/Reuters Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business. Hopes of a breakthrough in the US-China trade talks have taken a resounding knock, after American authorities hit technology firm Huawei with a string of criminal charges. The US Justice Department has…

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Labour report urges investment to revive struggling regions | Business – Business Article

A future Labour government should use funds from a national investment bank, targeted transport spending and buying British as part of a long-term strategy to spread economic prosperity to the struggling regions, a specially commissioned report for the party has said. The report called for funding from the national investment bank – a key plank of the opposition’s economic strategy to be heavily skewed in favour of communities hard hit by the decline in manufacturing, with funding per head more…

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Davos 2019: Greta Thunberg says it’s time to panic about climate change – live | Business – Business Article

At an event where success is often measured by who’s seen at a reception or speaks on a panel, the Saudis aren’t getting the cold shoulder any more. James Gorman, the head of Morgan Stanley, spoke on Thursday in a debate alongside two Saudi ministers. And the likes of Jamie Dimon of JPMorgan Chase & Co. and John Flint of HSBC Holdings Plc attended the annual Davos party thrown by Saudi oil giant Aramco, according to a person present. “I…

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Philip Hammond urges business leaders to accept Brexit result | Business – Business Article

Philip Hammond has told business leaders they need to accept the result of Britain’s EU referendum and warned that a failure to implement it would damage the country’s political stability. The chancellor told increasingly restless business leaders that he was working for a deal that safeguarded the economy, and said he understood their frustration but companies had to accept that changes were coming – such as an end to the free movement of people and business models built on a…

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