Reuters News - Pope denies audience with Pompeo; Vatican warns against playing politics over China

 ROME (Reuters) - The Vatican said on Wednesday it had denied a request from Mike Pompeo for an audience with Pope Francis, and accused the Secretary of State of trying to drag the Catholic Church into the U.S. presidential election by denouncing its relations with China.

The extraordinary remarks from the two top diplomatic officials at the Vatican came after Pompeo accused the Church in an article and a series of tweets this month of putting its “moral authority” at risk by renewing an agreement with China over the appointment of bishops.

Pompeo, who was in Rome on Wednesday and due to meet Vatican officials on Thursday, repeated his denunciations of China’s record on religious freedom at an event hosted by the U.S. embassy to the Holy See.

The Vatican’s two top diplomats, Secretary of State Cardinal Pietro Parolin and Foreign Minister Archbishop Paul Gallagher, said Francis had declined a request from Pompeo for an audience, as the pope avoids meeting politicians ahead of elections.

“Yes, he asked. But the pope had already said clearly that political figures are not received in election periods. That is the reason,” Parolin said.

The Vatican’s two-year-old agreement with Beijing gives the pope some say over the appointment of Chinese bishops. It was due to expire next month, but is expected to be renewed.

Officials in the Holy See say the agreement is not perfect but call it a step forward, after decades during which Chinese Catholics who recognise the pope were driven underground.

Parolin and Gallagher both described Pompeo’s public criticism as a “surprise”, coming just before his planned visit.

“Normally when you’re preparing these visits between high-level officials, you negotiate the agenda for what you are going to talk about privately, confidentially. It’s one of the rules of diplomacy,” Gallagher said.

“THAT’S JUST CRAZY”

Asked if he believed that Pompeo’s criticisms of the Vatican deal were intended for political use in the United States, Parolin said: “Some have interpreted it this way ... that the comments were above all for domestic political use. I don’t have proof of this but certainly this is one way of looking at it.”

The Vatican-China deal “is a matter that has nothing to do with American politics. This is a matter between Churches and should not be used for this type of ends,” Parolin said.

For his part, when asked at a briefing if he was “picking a fight” with the Vatican over China and what impact that could have on Catholic and other Christian voters, Pompeo replied: “That’s just crazy.”

President Donald Trump has campaigned on his hard line towards China ahead of the Nov. 3 election. He is also strongly associated with conservative Protestant and Catholic movements, many of which have been critical of Pope Francis.

In his speech on Thursday, Pompeo did not directly address the Vatican agreement with Beijing, but he described China as the world’s worst abuser of religious rights.

“Nowhere is religious freedom under assault more than in China,” Pompeo said. The Chinese Communist Party was looking to “to snuff out the lamp of freedom ... on a horrifying scale”.

Reporting by Philip Pullella; Editing by Peter Graff

Our Standards: The Thomson Reuters Trust Principles.

BBC News - Bank deputy governor warns against negative interest rates

 

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A Bank of England (BoE) deputy governor has spoken out against setting negative interest rates, which would bring the cost of borrowing below zero.

"At present, negative policy rates would be less effective as a tool to stimulate the economy," Sir Dave Ramsden told the Society of Professional Economists (SPE).

The Bank has so far responded to the pandemic by cutting rates to just 0.1%.

But some policymakers want it to do more.

If interest rates are negative, the BoE charges for any deposits it holds on behalf of the banks. That encourages banks to lend the money to business rather than deposit it.

But with interest rates already low, it's not clear how much negative rates would help spur new activity.

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And such a move raises the risk for banks, which make money by charging interest on loans and are typically hurt by lower rates.

Reducing rates now would also come just as banks face a higher risk of losses due to the pandemic, which has strained the ability of many of their customers to keep up with repayments on loans.

Sir Dave said the Bank of England needed to consider the potential impact on banks further before acting on negative rates.

"If you've got negative rates in the toolbox, I feel duty bound, given my duties at the bank, that you've then got to explore in more detail the operational considerations which would go with implementing negative rates," Sir Dave, a member of the BoE's Monetary Policy Committee (MPC) and Deputy Governor for Markets and Banking, told SPE.

"You don't want to be in the position where you've said you think you could use them, then say at some point in the future, the committee concludes actually we should use them, then you go back and look in the toolbox, and find that actually you can't use them for an operational reason."

Analysis by Szu Ping Chan, Business Reporter, BBC News

With interest rates already close to zero, the Bank of England has been looking for creative ways to keep the economy afloat.

Only a handful of central banks have joined the negative interest rates club, including Japan, Sweden, Switzerland and the European Central Bank.

Countries like Switzerland deployed negative rates to try to stop investors from ploughing money into the country, which was pushing up the strength of its currency.

But a blueprint for the UK wouldn't be as simple as copy and paste.

Savers who don't fancy being charged to put their money in the bank will just take their business elsewhere. Britain's banks are also being hit by loan losses as borrowers struggle to keep up with repayments. Squeezing their profits could push them into deeper trouble.

In any case, negative rates aren't around the corner. The Bank of England is using the next three months to look at how they could be implemented, before deciding whether they want to open the toolbox to use them.

Sir Dave added that the MPC was "not about to use [negative interest rates] imminently", and that it would "take time" to engage with the banks.

"We're continuing with a quantitative easing programme - no one is voting at present for negative rates," said Sir Dave.

"I see the effective lower bound [for interest rates] still at 0.1%, which is where Bank rate is at present. It is useful to stress that.

Sir Dave is one of few members of the Bank's nine-member Monetary Policy Committee to share his view of negative interest rates since the bank said it was considering such a step last month.

His warning marks a contrast to recent comments by Silvana Tenreyro, an external member of the committee, who told the Sunday Telegraph that evidence from other European countries and Japan suggested that negative interest rates had succeeded in cutting borrowing costs.

The evidence also showed that banks would cope with the extra pressure on their finances, despite the coronavirus pandemic, she added.

Reuters News - Russia's Novak says global energy players should jointly tackle demand crisis

 MOSCOW (Reuters) - Russian Energy Minister Alexander Novak on Sunday urged all global energy market players to combine efforts in order to combat the fallout from the spread of coronavirus, which has dampened fuel demand.

Speaking at an online conference of energy ministries from G20 countries, Novak also said global oil demand was seen falling by up to 10% this year due to the crisis, which has prompted companies to slash investment in production by 25-30%.

He also praised the efforts to stabilise oil market by the Organization of the Petroleum Exporting Countries and other large oil producers, led by Russia, a group known as OPEC+.

“Our task, as the leaders of the energy industry, is to show stamina and solidarity in the face of the challenges like that,” Novak said in comments about the damages inflicted by the spread of coronavirus.

Reporting by Olesya Astakhova and Elena Fabrichnaya; writing by Vladimir Soldatkin; editing by David Evans

Our Standards: The Thomson Reuters Trust Principles.

BBC News - Coronavirus: Working from home 'costs central London £2.3bn'

 

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image captionBusinesses in The City say they are "struggling" as people work from home

Coronavirus has created a £2.3bn black hole of spending in central London, new research has suggested.

Data from the Centre for Economics and Business Research (CEBR) underlined how spending in businesses near central London workplaces had been "lost or displaced" between March and July.

This week new government restrictions aimed at slowing the spread of Covid-19 saw working at home recommended again.

Businesses in The City said they have been "struggling" with workers absent.

'You don't see regulars'

Satyam Patel, who has run the Corner Shop in Bow Lane for 35 years, said he now saw 50 customers a day compared with 800 before lockdown.

"Trade's down 90%, it's very demoralising," he said. "You're just wondering what's going to happen and where you're going to end up.

"You don't see regular customers anymore. There are so many customers you don't see and you wonder where they are and how they are."

image captionTrade at Satyam Patel's shop is 90% down compared with before the lockdown

The CEBR looked at Google mobility data, which showed the number of people going to work in London in April during the height of the lockdown was 77% lower than before the crisis.

It also used research by the payment app iZettle and data from Nationwide Building Society to calculate a monthly spend of £202 by employees near their place of work before lockdown.

Nina Skero, chief executive of the CEBR, said: "During the months of March to July virtually everybody that could was working from home, so we estimate that the lost spending during that period was more than £500m per month because all of the spending on restaurants, hairdressers and other services was almost entirely lost as people were confined to their homes."

Prime Minister Boris Johnson told people to go back to work in August, amid warnings from business leaders that city centres could become ghost towns.

That message changed on Tuesday as the government urged people to work from home where possible to control the spread of coronavirus.

image captionLee Adams works at JMW Solicitors which is based in the City

JMW Solicitors, which is based in the City, brought 40% of its office staff back and said it had helped with productivity.

Lee Adams, a partner in the firm, said: "The number of ideas that come out when you have people collaboratively working in the same space are just much more tangible than perhaps emails flying around or zoom calls that are a bit more stilted."

But with the government guidance having changed the company said it would be looking at its policies again.

BBC News - Premium Bonds issuer slashes chance of winning

 

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National Savings and Investments (NS&I), which issues Premium Bonds, has slashed the interest rates it pays.

The dramatic cut will hit the savings of 25 million people who have invested with NS&I, which allows people to lend money to the government.

It will also reduce the chances of those who own Premium Bonds from winning any of the monthly prizes on offer, which include a £1m jackpot.

Savers will soon have a one-in-34,500 chance, against one-in-24,500 now.

It is also slashing the number of £100,000 prizes from seven to four and £50,000 prizes from 14 to nine.

Funding the crisis

As government spending increased to fund the response to the coronavirus crisis, so did the amount that NS&I was asked to raise for the government.

In July, its target was increased from £6bn to £35bn. In the first three months of its financial year to June, NS&I raised £14.5bn and it said demand had been "similarly high" in the second quarter, which finishes at the end of this month.

The savings scheme said some of its interest rates were above those offered by High Street banks, which caused a surge in demand.

"Reducing interest rates is always a difficult decision," said NS&I chief executive, Ian Ackerley.

"Given successive reductions in the Bank of England base rate in March, and subsequent reductions in interest rates by other providers, several of our products have become 'best buy' and we have experienced extremely high demand as a consequence," he said.

"It is important that we strike a balance between the interests of savers, taxpayers and the broader financial services sector; and it is time for NS&I to return to a more normal competitive position for our products."

The changes to Premium Bonds will come in for the December prize draw.

Meanwhile, interest rates on other products will be lower from 24 November - and they include some steep drops.

NS&I's direct saver will offer just 0.15% interest, down from 1% before. Meanwhile, the rate on its income bonds will fall to 0.01%. It was previously 1.15%.

The rate on its investment account will also be 0.01% when the rates change, that's down from 0.8%. And the direct ISA will offer 0.1%, compared with the 0.9% savers get at the moment.

Kids will do a bit better, getting 1.5% interest from the junior ISA, although that is still well below the 3.25% they can get now.

BBC News - Bank of England boss calls for furlough 'rethink'

 

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The governor of the Bank of England has called for the government to "stop and rethink" the furlough scheme.

The Job Retention Scheme is due to finish at the end of next month.

But speaking on a webinar hosted by the British Chambers of Commerce, Andrew Bailey suggested some sectors may benefit from further targeted help.

In August, Mr Bailey told the BBC he backed ending the current scheme, saying workers should be helped to move rather than stay in unproductive jobs.

However, on Tuesday, he suggested that did not preclude offering different types of support in its place.

He said the furlough scheme "has been successful" and said that he supported the chancellor's decisions, not wanting to "tie his hands".

But he added: "We have moved from a world of generalised employment protections, to specific and focussed areas."

Mr Bailey noted that at the peak of the crisis, around 30% of private sector employers were using the scheme, but as that decreased it had exposed the areas of the economy suffering most.

"[Furlough] has helped manage the shock, to firms and to labour [but now] the use of it, as far as we can tell, is more concentrated," he said.

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Earlier in the day, Whitbread, which owns Premier Inn and Beefeater, announced plans to cut 6,000 staff just days after the furlough scheme is due to end in October. Meanwhile Wetherspoon said it would shed up to 450 workers at pubs in airports.

And Mr Bailey's comments were made just hours before the Prime Minister Boris Johnson took to his feet in the Commons to reinstate guidance that office workers stay at home and confirm that pubs and restaurants will be forced to close at 22:00 from Thursday. UK Hospitality said the move was "effectively a lockdown" for city centre bars and restaurants.

"This is a huge, huge blow to hospitality and it will be potentially fatal for many businesses," it said.

Mr Bailey's comments echo the opinion of Labour leader Sir Keir Starmer, who has called on the government not to remove all support in one go.

Reuters News - U.S. Justice Dept weighs stripping federal funds from cities allowing 'anarchy'

 WASHINGTON (Reuters) - The U.S. Justice Department on Monday threatened to revoke federal funding for New York City, Seattle and Portland, Oregon, saying the three liberal cities were allowing anarchy and violence on their streets.

“We cannot allow federal tax dollars to be wasted when the safety of the citizenry hangs in the balance,” Attorney General William Barr said in a statement.

Spokespeople for the mayors’ offices in all three cities could not be immediately reached for comment.

Many cities across the United States have experienced unrest since the May death of George Floyd. In some cases the protests have escalated into violence and looting.

The federal government has mounted a campaign to disperse the racial justice protests, including by sending federal agents into Portland and Seattle and encouraging federal prosecutors to bring charges.

Last week, the Justice Department urged federal prosecutors to consider sedition charges against protesters who have burned buildings and engaged in other violent activity.

Monday’s threat to revoke federal funds was the government’s latest escalation in its quest to curb the protests.

It comes after President Donald Trump earlier this month issued a memo laying out criteria to consider when reviewing funding for states and cities that are “permitting anarchy, violence, and destruction in American cities.”

The criteria to make the president’s list include things such as whether a city forbids the police from intervening or if it defunds its police force.

In all three cities, the Justice Department said the leadership has rejected efforts to allow federal law enforcement officials to intervene and restore order, among other things.

Reporting by Sarah N. Lynch; Editing by Steve Orlofsky

Our Standards: The Thomson Reuters Trust Principles.

BBC News - Rising virus rates threaten economy, warns Bank

 

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The Bank of England has warned that the rising rate of coronavirus infections and a lack of clarity over the UK's future trade relationship with the EU could threaten the economic recovery.

It said much of output lost during lockdown had been recovered but the outlook remained "unusually uncertain".

The UK is still in a deep recession, while Covid-19 infections are at their highest level since mid May.

Citing the uncertainty, the Bank held interest rates at 0.1%, a historic low.

It added that it would continue its monetary support for the economy, but stopped short of increasing its bond-buying programme or reducing interest rates further.

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What are interest rates?

If you borrow money you usually have to pay a small fee set by the person lending to you. How high that fee - or interest rate - is depends on a "base rate" that is set by the Bank of England at meetings throughout the year.

The rate determines how much banks have to pay to borrow money, and that has a knock-on effect on how much the bank charges consumers to borrow.

When the economy is growing quickly the Bank tries to stop it overheating by raising interest rates, making it more expensive to borrow.

When the economy is sluggish, cutting the Bank's base rate lowers the cost of borrowing and can encourage businesses and consumers to spend more.

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The Monetary Policy Committee (MPC), which sets interest rate policy, said previous projections of economic recovery were "on the assumption of an immediate, orderly move to a comprehensive free trade agreement with the European Union on 1 January 2021".

Economic recovery would also depend on the evolution of the pandemic and measures taken to protect public health, the MPC said.

"The recent increases in Covid-19 cases in some parts of the world, including the United Kingdom, have the potential to weigh further on economic activity, albeit probably on a lesser scale than seen earlier in the year," it said.

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No change from the Bank of England on record low interest rates, nor on its wider support for the economy. On the face of it, the economy is less weak than it expected even last month, but profound uncertainties remain.

The Bank in particular pointed to "recent increases in Covid-19", including in the UK, that "have the potential to weigh further on economic activity", as well as a recent fall in sterling partly "reflecting recent Brexit developments".

Given rates are at rock bottom already, sterling was further hit from the fact that the Bank's deliberations over rates included a presentation over how "negative interest rates" might work.

The Bank had been concerned of the impact of, in effect, lenders paying borrowers for the health of parts of the banking system. It is, as it has previously signalled, looking at how this could be achieved in practice. Should the uncertainties visible to all materialise in the coming weeks for the UK, that extraordinary and unprecedented tool is being prepared as an option.

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The government has had to impose new social distancing restrictions across England, as rising cases have forced many areas into local lockdowns.

On Wednesday, the Prime Minister said the government was doing "everything in our power" to prevent another nationwide lockdown, which could have "disastrous" financial consequences for the UK.

Negative rates

The Bank of England said despite a stronger than expected recovery in the last few months, the economy was still about 7% smaller than at the end of last year.

Usually if the economy is not growing strongly enough, the Bank of England considers lowering interest rates to encourage firms to invest and savers to spend.

However, interest rates are already close to zero after two emergency rate cuts in March.

Minutes from this month's meeting show that the MPC discussed the use of negative interest rates to stimulate the economy. Last month, the Bank's governor, Andrew Bailey, appeared to rule that out, though he said negative interest rates remained in the "tool box".

If interest rates are negative the Bank of England charges for any deposits it holds on behalf of the banks. That encourages banks to lend the money to business rather than deposit it.

• What are negative interest rates?
• What exactly is the Bank of England interest rate?

The Bank also signalled that it had no intention of raising interest rates until "significant progress" had been made in getting inflation back to the Bank's 2% target. It is currently at a five-year low of 0.2%.

The Bank said it did not expect inflation to return to target levels for another two years.

"We expect interest rates to be no higher than 0.1% for the next five years," said Andrew Wishart, UK economist at Capital Economics.