Thursday, November 30, 2017

Bloomberg News - EU Pledges Increased African Investments to Slow Migration

Tuesday, November 28, 2017

BBC News - UK banks could handle 'disorderly Brexit'

Mark Carney
Mark Carney became governor of the Bank of England in 2013
The UK's banks could cope if Britain leaves the European Union in a "disorderly Brexit" in 2019, the Bank of England has said.
For the first time since the financial crisis, all of the UK's biggest lenders have passed the Bank's stress tests.
The tests of adverse economic scenarios discover if the banks could continue to lend money to support the UK economy.
Bank governor Mark Carney said they would be able to, even in "the unlikely event" of no deal when Brexit happens.
Mr Carney said that all parties were working to avoid the situation, but warned that if the UK did leave in a "sharp, disorderly" way there would be some economic "pain" for households and businesses.
The worst case scenario the Bank imagined in the stress tests included a 33% fall in house prices, a rise in interest rates from 0.5% to 4% within two years, and the unemployment rate rising to 9.5% from its current rate of 4.3%.

Insurance worries

The tests flagged up other Brexit concerns.
Six million UK customers buy insurance policies from EU companies and, after Brexit, those firms would not have permission to collect premiums or pay claims.
The same is true of the financial insurance that banks buy and sell to each other. Here the numbers are staggering - the notional value of those contracts are £26 trillion.
Without legislation from both the EU and the UK they may be hard to enforce and that would create financial instability.
The Bank of England offered a checklist of items to mitigate the impact of Brexit which included:
  • A clear EU-UK regulatory framework in place
  • Timely agreement on an implementation period
  • Legislation on both sides to preserve continuity of existing cross-border insurance and derivative contracts
Michael Snapes, financial services director at PwC, said: "There is some comfort to be had in the knowledge that the UK banking system is strong enough to withstand a severe economic deterioration.
"The results suggest that the major UK banks may finally be emerging fully from their post-crisis downturn."
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Analysis: Simon Jack, BBC business editor

Canary WharfImage copyrightGETTY IMAGES
The headline of the report sounds comforting - the UK financial system is strong enough to withstand a "disorderly Brexit".
By that, the Bank means an exit from the EU without a trade deal to replace our current relationship, the introduction of tariff and regulatory barriers and the potential forced relocation of people and businesses from the UK to the EU.
So everything is all right then? Er, not quite.
What the Bank is actually saying is that the economic shock to the system would be no worse than the economic tests it puts banks through anyway.
These economic tests are severe. A 33% fall in house prices, a more than doubling of the unemployment rate, a 25% drop in the pound and a rapid rise in interest rates from 0.5% to 4%. This is a dire economic scenario.
All the Bank is saying is that a disorderly Brexit would be no more apocalyptic than that. That is not much comfort.
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'Pockets of risk'

The Bank's Financial Policy Committee (FPC) also said it was increasing the amount that banks had to hold in reserve in case of an economic downturn.
Mr Carney said the growth of consumer credit in the UK had created "pockets of risk".
He said that domestic financial risks and the potential for new global economic issues meant banks should be prepared for further losses.
Mr Carney said the FPC was "taking action to ensure the financial system is resilient to a very broad range of risks".
Both Barclays and RBS, who did not pass the stress tests in a snapshot of their businesses at the end of 2016, had improved their financial positions since then, said the Bank.
As a result, both were deemed to have passed the stress tests overall.
Bank of EnglandImage copyrightPA
Lloyds, HSBC, Santander, Nationwide and Standard Chartered were the other lenders who took part.
Looking at this year's results, RBS's chief financial officer, Ewen Stevenson, said: "We continue to make progress towards the stress-resilient bank we aspire to be and 2017 represented another year of material improvement.
"Until we have resolved our remaining major legacy conduct issues and non-core portfolio interests, we will continue to show stress test results weaker than our long term targets."
In a statement, Barclays said: "Barclays was not asked to submit a revised capital plan by the Bank of England in light of the steps already taken during 2017."

Monday, November 27, 2017

BBC News - Black Friday sales bonanza set to hit a record

The Black Friday sales bonanza was on course for a record with consumers set to spend almost £8bn during what has become a four-day shopping event.
Black Friday sales advert
Barclaycard said transaction numbers were 32% up on last year, with Black Friday most likely behind the rise.
Retail researchers said online sales would see the most growth on Friday.
Shoppers are expected to spend £1.15bn - up 15% on the same day last year. On the High Street, sales were forecast to total £1.45bn, up 4% on 2016.
Barclaycard said the value of all transactions were up 8% on last year by mid afternoon.
Using Barclaycard data, it is not possible to split off what is everyday spending and what is spurred by Black Friday.
However, average weekly spending online in the UK stands at about £1.2bn according to the Office of National Statistics, so sales on Friday alone will be close to matching those in a normal week.
John Lewis, Game, Tesco and Argos have extended their high street opening hours and many retailers have already offered days of deals in a bid to maximise hype and spending around the event.
But many retailers have opted out, including Marks and Spencer. London's Harrods department store has also ignored Black Friday, saying that frenzied sales events "cheapen the brand".
And clothing retailer Primark said in a blog: "Black Friday? *Yawn* As if we'd make you wait all year for a flash sale, just to wow you with our totes increds prices."
Black Friday - which now includes weekend shopping promotions and Cyber Monday - has surged in popularity in the UK in recent years, and has become popular in mainland Europe.
According to predictions by VoucherCodes and the Centre for Retail Research, shoppers are expected to spend £7.8bn over the four-day period including Cyber Monday. That would be up 7% on the four days last year.
Barclaycard, which processes nearly half of all debit and credit card transactions in the UK, said between 1pm and 2pm it had processed a record 998 transactions in one second, compared with last year's peak of 791. Meanwhile, spending was up by 8% on the same period last year.
TopCashback's UK director Adam Bullock said "Black Friday is shaping up to be the biggest shopping day we have ever seen", with overall consumer spending increasing by 15% and £12,500 being spent per minute. The discount retailing site said it expects the figure to increase throughout the day.

Smaller Queues

However, there was a lack of early morning queues on Oxford Street Friday morning, although John Lewis had attracted a line of about 12 bargain hunters who stood outside the department store shortly before opening time.
Lawrence Konadu, 20, and Jeremy Opoku, 22, were heading to Japanese retailer Uniqlo to buy KAWS' second collection of the iconic comic strip Peanut, which launched on Friday.
"We still would have come out, but the release of this brand gave us more of a push," Mr. Opoku said.
But other shoppers said they didn't even realise it was Black Friday. Mark Norden said: "I didn't know it was Black Friday. I had a meeting around the corner and thought I would return some boots."

Waking up earlier

People are staying up later and waking up earlier for Black Friday deals. Online traffic between midnight and 6am rose 40% year-on-year, and was up 300% over a typical day, according to Katie Ward of Vouchercloud.
"We've increasingly discovered the trend of staying up later and waking up earlier for Black Friday deals is true and strong," Ms. Ward said.
The largest peak in spending was between 6am and 7am, with traffic rising more than 400%. Some 85% more shoppers checked deals before midnight.
Sales via smartphones may replace desktops on Black Friday this year, according to researcher PCA Predict, with more than 40% of transactions expected to be made on phones and tablets.
Dozens of retailers are offering a raft of deals online including Amazon, Currys PC World, Argos, Gap, Top Shop, Miss Selfridge and others.
Although online transactions have increased, basket sizes are lower so far, according to Global Savings Group.
The average basket size of online spenders is £107.35 compared with a normal day's spend of £151.42. About 60% of online discount hunters are female, the group said.
Black Friday originated in the US, where it takes place the day after Thanksgiving, traditionally kick-starting the Christmas shopping period.
Black Friday sales

Thursday, November 23, 2017

Bloomberg News - Britain's Budget Is an Impossible Balancing Act

Long-term problems and short-term unknowns have put the chancellor of the exchequer in a bind.

He's no miracle worker.
 Photographer: Chris J Ratcliffe/Bloomberg
Pity Philip Hammond, the U.K.'s chancellor of the exchequer. His budget announcement today has to contend not just with the long-term fiscal implications of sluggish growth in productivity -- a nagging issue for the British economy -- but also with the government's lack of a parliamentary majority and the enormous uncertainty surrounding Brexit.
These conditions demand an exacting balance of discipline and flexibility. Despite its political weakness, the government needs to affirm its commitment to sound budget control: Austerity is still necessary. At the same time, Hammond should acknowledge the uncertainties, and show that budget policy can adapt if need be.
Over the past six months, despite a weakening economy, the budget numbers have turned out a bit better than expected. Even so, the medium-term outlook remains poor. Sluggish growth in productivity looks set to continue. If it does, this will put downward pressure on tax revenues. Without faster medium-term growth, the government is unlikely to achieve its stated goals of eliminating the structural budget deficit and substantially reducing public debt by the middle of the next decade.
Right now, unfortunately, looser fiscal policy won't help. Lack of demand is no longer the problem: Unemployment is low and the Bank of England is cautiously tightening monetary policy. What's worse, more spending on public-sector wages -- an all-too-likely possibility -- would do nothing for growth.
For the most part, Hammond should try to hold the line on fiscal discipline. Britain's public debt, at roughly 90 percent of output, needs to come down over time. Until it does, there's no room for tax cuts, and continued restraint on current public spending will be needed to enable valuable public investment in the future.

Yet the chancellor should also explain that the Brexit challenge makes attachment to specific timetables risky. With Brexit looming, the outlook for the U.K. economy has never been so uncertain -- and in budget policy there's a difference between rectitude and rigidity.
An orderly Brexit with a smooth transition to a close economic partnership with the EU would make fiscal consolidation easier. A so-called cliff-edge Brexit, imposing enormous costs on British industry, would be a very different matter -- demanding greater up-front outlays with correspondingly severe tightening later. The direct impact of the Brexit settlement on Britain's fiscal outlook is a huge unknown in its own right.
Confident fiscal planning is indeed impossible under these circumstances, and Hammond shouldn't try to pretend otherwise. But one of the main values of budget discipline is that it leaves room to respond to unknowns. This ought to be the chancellor's message. His budget should be conservative fiscally yet show a readiness to spend -- if, but not before, the need arises.
    To contact the senior editor responsible for Bloomberg View’s editorials: David Shipley at .

    Wednesday, November 22, 2017

    BBC News - Zimbabwe's Robert Mugabe resigns, ending 37-year rule

    Zimbabwe's President Robert Mugabe has resigned, parliament speaker Jacob Mudenda has said.
    A letter from Mr Mugabe said the decision was voluntary and he had made it to allow a smooth transfer of power.
    The surprise announcement halted an impeachment hearing that had begun against him and sparked wild celebrations on the nation's streets.
    The ruling Zanu-PF party says former vice-president Emmerson Mnangagwa will succeed Mr Mugabe, in power since 1980.
    Mr Mnangagwa's sacking earlier this month triggered a political crisis.
    It had been seen by many as an attempt to clear the way for Grace Mugabe to succeed her husband as leader and riled the military leadership, who stepped in and put Mr Mugabe under house arrest.
    After the resignation announcement, lawmakers roared in jubilation.
    Mr Mugabe, 93, was until his resignation the world's oldest leader. He had previously refused to quit despite last week's military takeover and days of protests.
    According to the constitution his successor should be the current vice-president, Phelekezela Mphoko, a supporter of Grace Mugabe.
    But Zanu-PF chief whip Lovemore Matuke told Reuters news agency that Mr Mnangagwa would be in office "within 48 hours".
    Speaking from an undisclosed location earlier on Tuesday, Mr Mnangagwa said he had fled abroad two weeks ago when he learned of a plot to kill him.

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    An untypical end

    Analysis by BBC world affairs editor, John Simpson

    Robert Mugabe in 1980Image copyrightGETTY IMAGES

    Most people assumed that the only way Robert Mugabe would give up being president was to die in his bed. He probably thought so too.
    In fact the last of the old-style 1970s and 80s liberation leaders most untypically resigned in writing. Perhaps that says something about the way the world has changed in the 21st Century.
    No storming the presidential palace, no ugly end at the hands of a crowd like Col Gaddafi, no execution by firing squad like President Ceausescu of Romania, no hanging like Saddam Hussein.
    Zimbabwe, in spite of everything Robert Mugabe visited upon it, is essentially a peaceable, gentle country. And despite all the immense crimes for which he was responsible, he is in some ways an intellectual, rather than a brutal thug along the lines of, say, Idi Amin.
    He'll be remembered for the massacres in Matabeleland in the 1980s, for the farm invasions of the 1990s and later, and for the brutal repression of the opposition Movement for Democratic Change when it seemed on course to win the 2008 presidential election.
    The man who seems about to take his place, Emmerson Mnangagwa, was deeply involved in most of those crimes, yet people in Zimbabwe, like the outside world, will be so relieved to see Mr Mugabe go that they will be tempted to forget all that.
    They'll also forget the few unquestionably good things Robert Mugabe did. Zimbabwe, for instance, has an extraordinarily high literacy rate, because of him. But that's certainly not what he'll be remembered for.

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    'Let him rest in his last days'

    UK Prime Minister Theresa May said Mr Mugabe's resignation "provides Zimbabwe with an opportunity to forge a new path free of the oppression that characterised his rule".
    She said that former colonial power Britain, "as Zimbabwe's oldest friend", will do all it can to support free and fair elections and the rebuilding of the Zimbabwean economy.
    Opposition leader Morgan Tsvangirai told the BBC he hoped that Zimbabwe was on a "new trajectory" that would include free and fair elections. He said Mr Mugabe should be allowed to "go and rest for his last days".
    In other reaction:
    • The US Embassy in Harare, the capital, said it was a "historic moment" and congratulated Zimbabweans who "raised their voices and stated peacefully and clearly that the time for change was overdue"
    • South Africa's main opposition Democratic Alliance welcomed the move, saying Mr Mugabe had turned from "liberator to dictator"
    • Prominent Zimbabwean opposition politician David Coltart tweeted: "We have removed a tyrant but not yet a tyranny"
    • Civil society group the Platform for Concerned Citizens called for dialogue between all political parties, which it said should lead to the formation of a national transitional authority
    Robert Mugabe won elections during his 37 years in power, but over the past 15 years these were marred by violence against political opponents.
    He presided over a deepening economic crisis in Zimbabwe, where people are on average 15% poorer now than they were in 1980.
    However, Mr Mugabe was not forced out after decades in power by a popular mass movement but rather as a result of political splits within his Zanu-PF party.
    The leader of the influential liberation war veterans - former allies of Mr Mugabe - said after the army takeover that Mr Mugabe was a "dictator", who "as he became old, surrendered his court to a gang of thieves around his wife".

    'It has happened'

    Mr Mugabe's decision to finally resign sparked joy in the streets.
    "We are just so happy that things are finally going to change," Togo Ndhlalambi, a hairdresser, told the AFP news agency.
    "I am the happiest person under the sun right now, because I always believed that Mugabe was going to step down in my lifetime and it has happened," human rights activist Linda Masarira told the BBC.
    "And now going forward it's time for the opposition to reorganise and ensure that we will have a government that cares for the people. And everyone has to be included."

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    Robert Mugabe - Timeline of a political life

    Grace and Robert Mugabe togetherImage copyrightAFP
    Image captionPresident Mugabe was accused of preparing the presidency for his wife Grace

    • 1924: Born
    • 1964: Imprisoned by Rhodesian government
    • 1980: Wins post-independence elections
    • 1996: Marries Grace Marufu
    • 2000: Loses referendum, pro-Mugabe militias invade white-owned farms and attack opposition supporters
    • 2008: Comes second in first round of elections to Morgan Tsvangirai who pulls out of run-off amid nationwide attacks on his supporters
    • 2009: Amid economic collapse, swears in Mr Tsvangirai as prime minister, who serves in uneasy government of national unity for four years
    • 2017: Sacks long-time ally Vice-President Emmerson Mnangagwa, paving the way for his wife Grace to succeed him. Army intervenes and forces him to step down.