Babak Belurs

Jumat, 09 Agustus 2019

UK economy shrinks in second quarter - BBC News

The chancellor has told the BBC that he does not expect the UK to slide into recession after data showed the economy shrank by 0.2% between April and June.

Sajid Javid was speaking after the Office for National Statistics said the economy had contracted for the first time since 2012.

The surprise decline came after Brexit stockpiles were unwound and the car industry implemented shutdowns.

The pound slid after the data was released, raising fears of a recession.

It hit a 31-month low against the dollar at $1.2056. Against the euro, it fell to a new two-year low of €1.0768.

Rob Kent-Smith, head of GDP at the ONS, said manufacturing output fell and the construction sector weakened.

A recession occurs when the economy contracts in two consecutive quarters. This is the first contraction since the fourth quarter of 2012.

Economists had not been forecasting a contraction in the economy in the second quarter, but had expected it to stagnate, with the consensus forecast for 0% growth.

Why is the economy shrinking?

The economy had shown 0.5% growth in the first quarter after manufacturers' stockpiling ahead of Brexit helped to boost output, when the manufacturing sector recorded its biggest quarter rise since the 1980s.

The ONS said GDP had been "particularly volatile" so far this year because of the changes to activity sparked by the original Brexit date of 29 March.

The statistics body said its latest figures showed that those increased stockpiles had been partly run down in the second quarter and that a number of car manufacturers had brought forward their annual shutdowns to April as part of contingency planning, which also hit growth.

Mr Kent-Smith said: "Manufacturing output fell back after a strong start to the year, with production brought forward ahead of the UK's original departure date from the EU."

He added that "the often-dominant service sector delivered virtually no growth at all".

What is the chancellor saying?

Mr Javid told the BBC: "I am not expecting a recession at all. And in fact, don't take my word for it. There's not a single leading forecaster out there that is expecting a recession, the independent Bank of England is not expecting a recession. And that's because they know that the fundamentals remain strong."

The Bank said earlier this month it expects the economy to grow by 1.3% this year, down from a previous projection of 1.5% in May.

Asked about the impact of Brexit, he said: "We saw some significant stockpiling by British businesses in anticipation of the Brexit that never was, and now they're using those stockpiles, they're coming down.

"Of course, there are businesses out there that are taking Brexit into account when they're making decisions."

He said: "No one will be surprised by today's figures."

What is happening to growth elsewhere?

The data comes at a time when there are signs other economies are slowing. For instance, data on Friday showed that French industrial output fell more than expected in June.

Mr Javid said: "This is a challenging period across the global economy, with growth slowing in many countries.

"But the fundamentals of the British economy are strong - wages are growing, employment is at a record high and we're forecast to grow faster than Germany, Italy and Japan this year."

But John McDonnell, the shadow chancellor, said the "dismal economic figures are a direct result of Tory incompetence".

"The Tories' Brexit bungling, including Boris Johnson now taking us towards no-deal, is breaking the economy."

The Liberal Democrats were also concerned about the impact of a no-deal Brexit.

"Pursuing a no-deal Brexit is a political choice without a mandate: these figures show people's jobs and livelihoods are being sacrificed at the altar of political extremism, " said Chuka Umunna, the party's Treasury and business spokesperson.

Mr Javid said the best way to deal with Brexit uncertainty was to leave the EU on 31 October, with or without a deal.

"We're seeing volatility in the figures and one of the best ways to actually end this volatility is to bring certainty around Brexit and make sure we leave on 31 October."

What does business say?

The employers' body, the CBI, said the contraction was "concerning".

Alpesh Paleja, CBI lead economist, said: "Growth has been pushed down by an unwind of stockpiling and car manufacturers shifting their seasonal shutdowns.

"Nonetheless, it's clear from our business surveys that underlying momentum remains lukewarm, choked by a combination of slower global growth and Brexit uncertainty.

"As a result, business sentiment is dire."

The Federation of Small Businesses - which is calling for an emergency Budget - said that if the Treasury delays action until after 31 October, the date for Brexit, its efforts are likely to prove too little, too late.

"Time is of the essence. Unless the chancellor steps in imminently with radical action, we could be heading for a chaotic autumn - and a very long winter," said the FSB's policy and advocacy chairman, Martin McTague.

How have economists reacted?

Chris Williamson, chief business economist at IHS Markit, said the data showed "an economy in decline and skirting with recession as headwinds from slower global growth are exacerbated by a Brexit-related paralysis".

Geoffrey Yu of UBS Wealth Management said that while the global picture was "becoming more gloomy", anyone looking for positive signs for the economy could look to "robust private consumption, reflecting a healthy labour market".

Household spending rose 0.5% on the quarter. Samuel Tombs, chief UK economist at Pantheon Macroeconomics, agreed that household spending was still growing at a "robust rate" and said it was not time to panic.

He said the stockpiling was dragging on the economy, which was "sluggish and had not stalled".

What has happened to the pound?

The pound - which has been at two-year lows following Brexit uncertainty - fell after the data was released.

The currency also falls if there are expectations that interest rates will be cut. Mr Tombs said the market now sees a 70% chance of an interest rate cut in January, when Mark Carney is due to leave as the Bank of England's governor.

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https://www.bbc.com/news/business-49290926

2019-08-09 15:13:22Z
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Train bosses backtrack over Interrail | News - The Times

British train companies have reversed their decision to leave the Interrail and Eurail schemes after strong criticism.

More than 30,000 passengers with a European-wide Interrail ticket would have been barred from using it in the UK and have had to buy a separate ticket for up to £570 a month.

The Interrail pass, launched in 1972, allows European residents to travel in 31 European countries by train and ferry for £620 a month. The Eurail ticket has the same benefits but can be bought by people from outside the European Union.

Yesterday the Rail Delivery Group (RDG), an industry body, said that it had struck a deal after talks with Eurail Group, the company that runs the programmes, following the “strong reaction to news of…

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https://www.thetimes.co.uk/article/train-bosses-backtrack-over-interrail-x8r69s5cl

2019-08-08 23:01:00Z
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Rabu, 07 Agustus 2019

British scientist disappears on Greek island after going for a run - CNN

Natalie Christopher, a 35-year-old astrophysicist, was visiting the island with her partner from their home in Cyprus but wasn't in their accommodation when her partner woke up on Monday morning, a close friend of Christopher told CNN.

Christopher's partner spoke to her by telephone and she told him she had gone out for a run, but when she hadn't returned after several hours and had stopped answering her phone, her partner reported her missing.

The pair were on the last day of their three-day trip to the island, police told CNN. Police, fire vehicles and a helicopter have all been mobilized to search for Christopher, they added in a statement.

Man confesses to murdering US scientist Suzanne Eaton in Crete

The search has focused on Ikaria's southeastern coast after a signal from the missing woman's cell phone was reportedly picked up in the vicinity.

Police officials told CNN on Wednesday that "the woman's phone is now switched off."

Vassilis Theodorakis, the owner of the Blue SeaSide Studios hotel where the couple were staying, said authorities have extensively searched two possible running routes in the area.

"One leading to a beach that is accessible by car and an easy path for an experienced runner as the lady was said to be. The other path leads towards a mountain village and has some difficult points," Theodorakis said. Christopher's Facebook page includes photos showing her running in various locations.

Christopher's sister has appealed for anyone with information to assist in the search, but urged people not to drain her battery by calling her.

On Sunday, hours before she went missing, Christopher posted images on Facebook of her holiday on the island. "Beautiful spot for swimming and deep water solo ... had so much fun here today!" she wrote.

The island has a population of around 10,000 and is a popular destination for tourists.

Police said on Wednesday morning that the Greek defense ministry was assisting with the search.

Christopher is the second scientist to go missing while visiting Greece in recent months. US scientist Suzanne Eaton was attending a conference on the island of Crete when she disappeared in July, also apparently during a run. Her body was later found and a 27-year-old man confessed to her murder.

Elinda Labropoulou contributed reporting.

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https://www.cnn.com/2019/08/07/europe/natalie-christopher-ikaria-missing-scli-gbr-intl/index.html

2019-08-07 13:44:00Z
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British scientist disappears on Greek island after going for a run - CNN

Natalie Christopher, a 35-year-old astrophysicist, was visiting the island with her partner from their home in Cyprus but wasn't in their accommodation when her partner woke up on Monday morning.

He spoke to her by telephone and Christopher told him she'd gone out for a run, CNN affiliate CNN Greece reported. But when Christopher hadn't returned after several hours and had stopped answering her phone, her partner reported her missing.

Police, fire vehicles and a helicopter have all been mobilized to search for Christopher, Greek police said.

Police detected a signal from her cell phone on Tuesday, around 24 hours after she went missing, but were unable to locate her, according to CNN Greece.

Christopher's sister has appealed for anyone with information to assist in the search, but urged people not to drain her battery by calling her.

On Sunday, hours before she went missing, Christopher posted images on Facebook of her holiday on the island.

"Beautiful spot for swimming and deep water solo ... had so much fun here today!" she wrote.

The island has a population of around 10,000 and is a popular destination for tourists.

Police said on Wednesday morning that the Greek defense ministry was assisting with the search.

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https://www.cnn.com/2019/08/07/europe/natalie-christopher-ikaria-missing-scli-gbr-intl/index.html

2019-08-07 09:48:00Z
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Selasa, 06 Agustus 2019

EU officials: No basis for further UK Brexit talks - BBC News

The government has rejected claims it is unwilling to negotiate with the EU and wants talks to fail to allow a no-deal Brexit.

It comes after the EU said UK demands to remove the Irish backstop from Theresa May's deal were unacceptable.

EU negotiators told European diplomats there was currently no basis for "meaningful discussions" and talks were back where they were three years ago.

Downing Street said the EU needed to "change its stance".

The European Commission said on Tuesday morning it was willing to hold talks in the coming weeks by phone or in person, "should the UK wish to clarify its position in more detail".

A spokeswoman added the agreement negotiated by Mrs May - rejected three times by MPs - was the "best possible deal", and could not be re-opened.

Many opponents of Mrs May's deal cite concerns over the backstop - an insurance policy to prevent a hard border returning on the island of Ireland - which if implemented, would see Northern Ireland staying aligned to some rules of the EU single market.

It would also involve a temporary single customs territory, effectively keeping the whole of the UK in the EU customs union. These arrangements would apply unless and until both the EU and UK agreed they were no longer necessary.

A No 10 spokesperson said: "The prime minister wants to meet EU leaders and negotiate a new deal - one that abolishes the anti-democratic backstop.

"We will throw ourselves into the negotiations with the greatest energy and the spirit of friendship and we hope the EU will rethink its current refusal to make any changes to the withdrawal agreement."

New Prime Minister Boris Johnson has pledged to leave the EU by the deadline of 31 October, with or without a deal.

BBC Brussels reporter Adam Fleming said the meeting on Sunday between officials and diplomats was a debrief from discussions last week between the EU, UK Brexit Secretary Steve Barclay and Mr Johnson's European envoy, David Frost.

A senior EU diplomat told the meeting a no-deal Brexit appeared to be the UK government's "central scenario", according to the Daily Telegraph and the Guardian.

"It was clear UK does not have another plan. No intention to negotiate, which would require a plan," the diplomat is reported to have said.

Mr Frost reiterated the prime minister's stance that the backstop element of Mrs May's plan must be abolished, and stressed that Mr Johnson's new ministers were not bound by commitments made by the previous government.

He also raised concerns about the UK's "divorce bill" and the proposed role of the European Court of Justice, the EU's top court, after Brexit.

'Continued dialogue'

Further talks between the two sides have not been ruled out, and Adam Fleming said the G7 summit in France at the end of August could be the moment of truth - the point at which a no-deal Brexit becomes inevitable.

Meanwhile, Mr Johnson is meeting his first foreign leader since entering Downing Street - Estonian Prime Minister Juri Ratas.

The country's Foreign Minister, Urmas Reinsalu, said earlier that while the "reality" was the withdrawal agreement - including the backstop - had been jointly agreed by EU member states, there was still a need for continued dialogue in the coming weeks to avoid a no-deal Brexit.

He told BBC Radio 4's Today programme alternatives to the backstop could be discussed after the ratification of the withdrawal deal.

No reason to get back round the table

The EU is not optimistic about any agreement with the UK.

The message they are getting from Boris Johnson's team is that the UK is not going to sign another deal unless it involves getting rid of the backstop.

But the EU has been clear time and time again that it isn't going to do that - the backstop is an integral part of any withdrawal agreement and it has to stay.

So the conclusion of officials is there is no reason to get back round the table at the moment, for the simple reason that they don't think they can meet the conditions Boris Johnson has set.

There are a couple of months to try to eke something out from one of the sides - to see if somebody blinks and there is some room for negotiation either in Brussels or in London.

But at the moment, many people think the direction of travel is heading towards a no-deal Brexit.

The meeting follows an interview with Health Secretary Matt Hancock, who said he believed Parliament could no longer block the UK from leaving the EU without a deal.

In a no-deal scenario, the UK would immediately leave the EU with no agreement about the "divorce" process, and would exit overnight from the single market and customs union.

Opponents say a no-deal exit would damage the economy and lead to border posts between Northern Ireland and the Republic. Other politicians argue any disruption could be quickly overcome.

Prominent pro-EU Conservative Dominic Grieve said there were still a number of options available to MPs to block a no deal - including bringing down the government with a vote of no confidence.

Meanwhile, Foreign Secretary Dominic Raab will begin a tour of North America on Tuesday as part of a bid to "fire up" the UK's trade relationships with countries outside the EU.

Mr Raab said the foreign ministers he saw at a meeting of the Association of Southeast Asian Nations in Thailand last week expressed a "consistent warmth" for the UK and a "desire to work more closely with us".

However, the former US treasury secretary, Larry Summers, said the UK was "delusional" if it believed it could secure a post-Brexit trade deal with Washington.

He told BBC Radio 4's Today programme: "Britain has no leverage, Britain is desperate... it needs an agreement very soon. When you have a desperate partner, that's when you strike the hardest bargain."

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https://www.bbc.com/news/uk-politics-49240809

2019-08-06 09:35:25Z
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EU officials: No basis for further UK Brexit talks - BBC News

The government has rejected claims it is unwilling to negotiate with the EU and wants talks to fail to allow a no-deal Brexit.

It comes after the EU said UK demands to remove the Irish backstop from Theresa May's deal were unacceptable.

EU negotiators told European diplomats there was currently no basis for "meaningful discussions" and talks were back where they were three years ago.

Downing Street said the EU needed to "change its stance".

The withdrawal agreement negotiated by Mrs May has been rejected three times by MPs.

Many opponents cite concerns over the backstop - an insurance policy to prevent a hard border returning on the island of Ireland - which if implemented, would see Northern Ireland staying aligned to some rules of the EU single market.

A No 10 spokesperson said: "The prime minister wants to meet EU leaders and negotiate a new deal - one that abolishes the anti-democratic backstop.

New Prime Minister Boris Johnson has pledged to leave the EU by the deadline of 31 October, with or without a deal.

BBC Brussels reporter Adam Fleming said the meeting on Sunday between the officials and diplomats was a debrief from discussions last week between the EU, UK Brexit Secretary Steve Barclay and Mr Johnson's European envoy, David Frost.

A senior EU diplomat told the meeting a no-deal Brexit appeared to be the UK government's "central scenario", according to the Daily Telegraph and the Guardian.

"It was clear UK does not have another plan. No intention to negotiate, which would require a plan," the diplomat is reported to have said.

Mr Frost reiterated the prime minister's stance that the backstop element of Mrs May's plan must be abolished.

He also stressed that Mr Johnson's new ministers were not bound by commitments made by the previous government.

'Continued dialogue'

Meanwhile, Mr Johnson is due to meet his first foreign leader since entering Downing Street when Estonian Prime Minister Juri Ratas arrives for a meeting.

The country's Foreign Minister, Urmas Reinsalu, said while the "reality" was that the withdrawal agreement - including the backstop - had been jointly agreed by EU member states, there was still a need for continued dialogue in the coming weeks to avoid a no-deal Brexit.