BBC News - Earlier end to subsidies for new UK onshore wind farms

New onshore wind farms will be excluded from a subsidy scheme from 1 April 2016, a year earlier than expected.

There will be a grace period for projects which already have planning permission, the Department of Energy and Climate Change said.

But it is estimated that almost 3,000 wind turbines are awaiting planning permission and this announcement could jeopardise those plans.

Energy firms had been facing an end to subsidies in 2017.

The funding for the subsidy comes from the Renewables Obligation, which is funded by levies added to household fuel bills.

After the announcement was made, Fergus Ewing, Scottish minister for business, energy and tourism and member of the Scottish parliament, said he had warned the UK government that the decision could be the subject of a judicial review.

"The decision by the UK government to end the Renewables Obligation next year is deeply regrettable and will have a disproportionate impact on Scotland, as around 70% of onshore wind projects in the UK planning system are here," he added.

'Energy mix'

The move was part of a manifesto commitment by the Conservative party ahead of the general election in May.

"We are driving forward our commitment to end new onshore wind subsidies and give local communities the final say over any new wind farms," said Energy and Climate Change Secretary Amber Rudd.

"Onshore wind is an important part of our energy mix and we now have enough subsidised projects in the pipeline to meet our renewable energy commitments," she said.

The Conservatives also say that the onshore turbines "often fail to win public support and are unable by themselves to provide the firm capacity that a stable energy system requires".

Gordon MacDougall, managing director of Renewable Energy Systems, a Sir Robert McAlpine Group company, told the BBC that "what we are seeing is political intervention".

And he criticised the intervention in what he says is the cheapest form of low-carbon energy.

The grace period could allow up to 5.2 gigawatts (GW) of wind capacity to go ahead, which could mean hundreds more wind turbines going up across the UK.

Bloomberg News - World Hasn’t Had So Many Refugees Since 1945, Report Says

Syrians climb through a broken border fence to enter Turkey on June 14. Photographer: Bulent Kilic/AFP/Getty Images

The world hasn’t had so many refugees or internally displaced people since 1945, and numbers are expected to increase, according to an Australian research center.

About 1 percent of the global population, or about 73 million people, have been forced to leave their homes amid a spike in armed conflict over the past four years, the Institute for Economics and Peace, which compiles the Global Peace Index, said in a report published on Wednesday.

“One in every 130 people on the planet is currently a refugee or displaced and most of that comes out of conflicts in the Middle East,” institute director Steve Killelea said by phone. The numbers in Syria, where as many as 13 million of its 22 million people are displaced, are “staggering,” he said.

The number of people killed in conflict rose to 180,000 in 2014 from 49,000 in 2010; of that number, deaths from terrorism increased by 9 percent to an estimated 20,000, according to the report. The impact of this violence on the global economy, including the cost of waging war, homicides, internal security services, and violent and sexual crimes, reached $14.3 trillion in the past year, it said.

“To put into perspective, it’s 13.4 percent of global gross domestic product, equivalent to the combined economies of Brazil, Canada, France, Germany, Spain and the U.K.,” Killelea said. “It’s also more than six times the total value of Greece’s bailout and loans from the IMF, ECB and other euro zone countries combined.”

Iceland tops the index as the most peaceful country in the world, Syria as the least.

by Caroline Alexander

BBC News - Russia cuts interest rates from 12.5% to 11.5%

Russia has cut its main interest rate from 12.5% to 11.5% as inflation eases.

In a statement the country's central bank said it had lowered its one-week minimum auction repo rate by 1 percentage point.

Inflation eased from a high of 16.9% in March to 15.8% in May.

The bank also repeated that it was concerned about a "considerable" cooling of the economy. It said it expected gross domestic product to contract by 3.2% this year.

The Russian rouble was little changed after the rate decision as it was in line with analyst predictions.

Interest rates had hit 17% last December in an emergency move to halt a run on the rouble.

Russia's economy is being squeezed by Western sanctions over the situation in Ukraine, and a fall in global oil prices.

Bloomberg News - Europe Raises Heat on Greece to Make Further Concessions

The Athens Stock Exchange in on June 15, 2015.

 

Photographer: Louisa Gouliamakii/AFP via Getty Images

European policy makers raised pressure on Greece to return to the negotiating table and make further concessions to unlock aid, as each side laid out its demands to rally support for its respective position.

Stocks and the euro fell on Monday as the extent of the policy divide that remains to be resolved was laid bare after weekend talks billed by European officials as a last attempt to end the standoff broke up early.

Europe needs a “strong and comprehensive agreement, and we need this very soon,” European Central Bank President Mario Draghi told lawmakers at the European Parliament in Brussels on Monday. “While all actors will now need to go the extra mile, the ball lies squarely in the camp of the Greek government to take the necessary steps.”

With signs that negotiating fatigue was stoking intransigence on all sides, some euro-area officials publicly raised the prospect of Greece’s exit from the currency region as the Greek government suggested it had reached the limits of its ability to make concessions. Finance Ministry officials from the 19-nation euro zone are due to hold a Greece call on Tuesday ahead of a meeting of ministers later this week.

“We’re reaching a potential period of turbulence if no accord is found,” French President Francois Hollande told reporters in Paris on Monday. “This is a message for Greece, because Greece mustn’t wait, it must renew talks with the institutions,” he said, referring to the International Monetary Fund, the ECB and the European Commission.

Awaiting Invitation

Greek Prime Minister Alexis Tsipras’s government said that it was awaiting an invitation from its creditors and is ready to respond anytime to continue the negotiations, according to an e-mail from the premier’s office.

The EU commission and IMF separately outlined their respective goals in the talks that broke up after just 45 minutes on Sunday. The focus now shifts to a June 18 meeting of euro-area finance ministers in Luxembourg. Officials have focused on that as a make-or-break session for Greece’s ability to avert default and stay in the currency union.

Tsipras, in a statement on Monday, portrayed Greece as the torchbearer of democracy, standing firm against creditors’ demand for pension cuts.

“One can only suspect political motives behind the fact that the institutions insist on further pension cuts, despite five years of pillaging,” Tsipras said. “We will wait patiently til the institutions adhere to realism.”

That prompted a rebuke from the European Commission.

“It is a gross misrepresentation of facts to say the institutions are calling or have called for cuts in individual pensions,” spokeswoman Annika Breidthardt told reporters in Brussels.

BBC News - Years more spending cuts to come, says OBR

Further cuts in government spending will be needed beyond this parliament in order to bring the national debt under control, the Office for Budget Responsibility (OBR) has warned.

In its annual report, the OBR said that without further spending cuts or tax rises, the national debt would only increase.

It said a permanent £20bn cut in annual public spending will be needed by 2020.

That would help bring the national debt down to 40% of GDP by 2064, it said.

If achieved, this means it would have taken more than half a century to bring the national debt back to the same level it was before the 2008 financial crisis.

Last year, public sector net debt was £1.48tn, or 80% of economic output, compared with around £600bn, or around 42% of GDP, in 2008.

And the OBR warned that even a cut of this size, equivalent to 1.1% of GDP, would not be sufficient to keep the national debt at 40% beyond 2064.

A Treasury spokesperson responded: "Our deficit is less than half what it was, but [today's] report from the OBR clearly shows the hard work that needs to be done to fix the public finances and deliver economic security and prosperity for working people."

The forecast spending cuts come a day after the Chancellor George Osborneannounced plans to bind future governments to operating a budget surplus during times of economic growth.

But the OBR cast doubt on the government's ability to maintain a surplus, forecasting the UK public sector borrowing would still be necessary by the mid 2030s as a result of the demands of an ageing population.

OBR chairman Robert Chote said the government needed to define what it meant by normal times, and that it might not be easy to calculate.

"No-one can know with confidence how much spare capacity there is in the economy or what the sustainable growth rate ... will be looking forward," he said. "Any rule needs to be defined in the knowledge that our estimates of these things may change."

The OBR said the government's triple-lock on the state pension - whereby the state pension rises by whichever is the greater of inflation, average earnings, or 2.5% - had resulted in an additional £2.9bn cost to the government, seven times higher than the £0.4bn increase originally forecast in 2010.

Earlier this week, ratings agency Moody's warned that the government will find it very difficult to achieve a budget surplus by 2018-19, and is still likely to be operating a deficit of between 1% and 2% of GDP by 2020.

Further cuts

The chancellor is due to announce spending cuts to welfare and government departments totalling £30bn over two years in his summer Budget next month.

The OBR warned if the government only made the cuts it has currently outlined, the national debt as a share of GDP would fall to 50% by the mid-2030s.

But it forecast debt to be 87% of GDP by the 2060s as a result of an ageing population, declining revenues from North Sea oil and gas, and the impact of student loans.

While admitting they were difficult to predict, the OBR forecast North Sea oil and gas revenues would fall to below 0.1% of GDP over the coming decades. It said the tax take from North Sea oil and gas had already fallen by 80% in the last three years.

That would mean a decline in revenues to £2bn in total between 2020 and 2040, down from last year's forecast of £37bn for the period.

The OBR said its latest forecast recognised the obvious collapse in oil prices in the past year but also the effect of lower production since last year.

Accumulated losses and future decommissioning costs would also impact future revenues, it said.

"Our analysis of longer-term pressures on revenue streams suggests that governments will, over time, need to find new sources of revenue to maintain the overall ratio of revenue to national income, let alone to meet the spending pressures from an ageing population," the OBR said.

Reuters News - Stocks extend gains, dollar lifted by Fed feelings

People pass electronic information boards at the London Stock Exchange in the City of London October 11, 2013.

REUTERS/STEFAN WERMUTH

European shares saw fresh gains on Thursday after their best day in over a month and as bets that the United States could be edging towards its first interest rate rise kept upward pressure on global bond yields and the dollar.

At the other end of the policy spectrum, the New Zealand dollar NZD= tumbled to a five-year low after its central bank cut interest rates for the first time in four years and South Korean shares got a lift as it cut rates to new a record low.

Underlying both moves was sluggish global demand, and in particular from the region's powerhouse China.

Fixed asset investment there grew at its slowest rate in over 14 years new data showed, although industrial output and retail sales growth did show signs of steadying following a recent dive.

Europe's main bourses <0#.INDEXE> picked after a slow start with the region's benchmark FTSEurofirst 300 .FTEU3 last up 0.5 percent, as hopes returned that Greece was close to sealing a deal with its creditors. Athens' stock market surged more than 6 percent. .ATG

The euro EUR= helped too with it back down to $1.1250 as the dollar .DXY got a lift ahead of what are expected to be healthy U.S. jobless claims and retail sales data later that could nudge the Federal Reserve towards an September rate rise.

It would be its first hike in almost a decade and would finally mark a turn in the direction of the flow of easy money that has repeatedly driven world stocks and bond prices to record highs in recent years.

"The day is going to be dominated in the end by whether signs of spring in the U.S. economy have continued, will Americans come out and flash cash at last," said Kit Juckes head of global currency strategy at Societe Generale.

"And from everything overnight, its the chill from China. There could be further downside in Australia and New Zealand (currencies) and we could be talking about Asian FX weakness as a theme going forward."

KIWI CRUSH

Overnight, Tokyo's Nikkei .N225 had added 1.4 percent while Australian shares gained 1.3 percent and South Korea's Kospi advanced 0.3 percent, as they reacted to regional macro news and followed Wednesday's strong gains by Wall Street.

New Zealand's rate cut saw its dollar slide more than 2 percent on the day to a five-year low of $0.7000 NZD=D4. Most economists had not expected a cut and though traders had been saying it was going to be a close call, it got a further hit as the RBNZ said it would ease again if needed.

"The RBNZ has again proved to be more flexible than the market gives it credit for," said Michael Turner, a strategist at RBC Capital Markets.

The yen gave back some of its previous session's gains against the dollar made on comments from Bank of Japan Governor Haruhiko Kuroda who said the yen was already "very weak."

The greenback was last up 0.4 percent at 123.21 yen JPY=, but still some distance from a 13-year high of 125.86 touched Friday on robust U.S. non-farm payrolls data.

The stronger dollar meant commodities were on the back foot again with Brent oil flat at just under $66 a barrel and metals markets from industrial copper to precious gold all deep in the red.

German benchmark 10-year Bund yields DE10YT=TWEB dipped in line with the euro as has become the trend in recent months but held above the psychological 1 percent mark as higher U.S. yields US10YT=RR kept them on a tight leash.

(Editing by Toby Chopra)

BBC News - Africa to create TFTA free-trade zone

The pact involves 26 countries from the three trade block from Cape Town to Cairo

Africa's largest free-trade zone is to be created, covering 26 countries and including more than 600 million people.

The deal, to be signed in Egypt, is intended to ease the movement of goods across member countries which represent more than half the continent's GDP.

Since the end of colonial rule, governments have been discussing ways to boost intra-African trade.

The poor state of roads, railways and national airlines have made it difficult to move goods across borders.

The deal is to be signed in Egyptian resort of Sharm al-Sheikh, where this soldier stands guard

Three existing trade blocks - the Southern African Development Community (Sadc); the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa) - are to sign the treaty to create the new zone.

The pact - known as the The Tripartite Free Trade Area (TFTA) - will then be officially unveiled at the upcoming summit of the African Union this weekend in South Africa.

The BBC's Africa business reporter Lerato Mbele says the idea behind it is to remove trade barriers on most goods, which will stimulate $1tn (£648bn) worth of economic activity across the region.

However, concluding the deal in Egypt will merely be the first step and it will need to be approved by each countries' parliament, before the wheels are set in motion, she says.

It is hoped that this will happen by 2017.