The International Monetary Fund (IMF) had downgraded its forecast for global growth this year and the following year by 0.1 per cent, marking down to 3.1 per cent this year and 3.4 the following year.

The Brexit had acutely heightened the risk of global economic uncertainty next to other complications cited by the G20 summit in Chengdu. The countries cited “geopolitical conflicts, terrorism and refugee flows” among the biggest problems the western world is facing today.

The G20 concluded that re-negotiations with the United Kingdom must happen and materialise quickly to minimise the possibility of uncertainties.

Finance Chiefs from the G20 said they would use all policy tools to aid the maintenance and growth of the global economy. This includes monetary easing, fiscal spending and structural change to boost growth.

The communique sent by the chiefs said the action can be taken individually and collectively.

They said it would be a priority to bring in those left out of economic prosperity to help resolve the global economic issues of today.

The embattled IMF managing director, Christine Lagarde – who faces prosecution in France on accusations of neglecting her duties as a government minister – abruptly cancelled a news conference after the meeting, citing scheduling conflicts.

“Lacklustre growth of the post-crisis era continues,” she said in a statement. “Structural reforms are particularly critical.”

28. June 2016 · Write a comment · Categories: Business · Tags: ,

As much as 20 per cent of the Pound Sterling’s value had dropped to its lowest in 30 years after the vote to leave the European Union.

The value of the sterling, along with the UK’s economy, had started to contract after British Prime Minister David Cameron had announced his resignation following the results of Brexit.

The implications have been large. Despite chances that the UK could remain in the EU’s market with a new agreement similar to Norway’s framework, the economic struggle for the United Kingdom is just beginning.

Conservative Leadership Candidate and UK Finance Minister George Osborne believes he isn’t fit to lead the Conservative party at this time. This is after the resignation of Prime Minister David Cameron.

“It isn’t in my nature to do things by half-measure, and I fought the referendum campaign with everything I’ve got. I believed in this cause and fought hard for it,” he wrote in The Times. “So it is clear that while I completely accept the result, I am not the person to provide the unity my party needs at this time.”

The Labour camp is currently experiencing a coup as 150 Labour MPs had called him to resign following the Brexit vote. Labour Leader Jeremy Corbyn had also sacked Shadow Foreign Secretary Hilary Benn of instigating a coup.

About 11 members of Corbyn’s cabinet had resigned following his sacking of Benn.

In the Conservative party, former London Mayor Boris Johnson had tried to paint himself as the next leader of the Conservative party. Despite analysts saying that the plan to penetrate the EU market once again is impossible, he says the UK can continue to access the European single market and limit freedom of movement after the Brexit.

British Prime Minister and campaigner David Cameron along with Finance Minister and BoE Chancellor George Osborne said that Britain should stay in the European Union as households would face the largest shortfall in the value of their homes.

It would also mean costly foreign holidays for voting for an EU exit.

Opinion polls showed that Britons are leaning towards an “in” decision and it could jeopardise Britain’s economic recovery.

“It would be like surviving a fall and then running straight back to the cliff edge. It is the self-destruct option,” Cameron said.

Brexit campaigners said the UK Treasury supporting the Prime Minister’s campaign had produced flawed and inconsistent reports.

According to former Thatcher Administration Conservative Prime Minister Nigel Lawson, the EU stay campaigners said they are assuming a disaster and has spelled out the details.

The former Prime Minister said:

“What they’ve done is they assumed a disaster and then spelled out the details,” Nigel Lawson, a finance minister under the late Conservative Prime Minister Margaret Thatcher in the 1980s, told BBC TV.

“They’ve done this in order to scare the pants off the British people because they can’t find anything positive to say about the European Union.”

By hitting a “soft” patch with the US economy, the US Federal Reserve showed itself to be in no rush to increase its interest rates, much to the relief of investors.

The US Central Bank’s rate-setting committee said a better labour market offset economic growth.

Meanwhile, the Central Bank committee said inflation still dominated most of the US’ economic growth. It also had concerns with the country’s slowed economic growth and the gloomy global economic forecast as well.

After the announcement, the dollar remained unchanged. However, investors are confident that there’s a 23 per cent probability that the Federal Reserve’s lending rate can rise in two months to June up from 21 per cent.

Investors expected an interest rate rise due to global concerns regarding the huge global equities sell-off due to the dropping stocks in China.

The Federal Reserve’s changed policy along with China’s slight recovery had helped ease investors’ concerns.

Meanwhile, US interest rates are very close to zero. Should the US economy become further undesirable, it may use “unconvential policy tools”.

Generally, analysts accept that the Federal Reserve is refraining from issuing forward guidance and is trying to ‘wait-and-see’ through the entire situation.

The Federal Reserve is fighting for the stability of the US economy despite its continuous stall spanning more than three years.

With minimal growth spurts dispersed throughout the last three years, consumers are still wary of spending on real economy services. Increased population savings is evidence of inflation, something the Fed will need to fight in the coming months.

Shoppers have remained cautious during a time slowdowns need to be offset. Due to the huge unemployment rate in the country, it is up to the Fed to continue injecting money to reduce inflation.

However, experts believe it might be straining out as it would require the raising of interest rates to ensure further stabilisation.

Analysts said that should the US fail to resolve its economic troubles, the Chinese stock troubles could possibly trigger further economic spirals worldwide.

Some experts had updated their economic outlook to gloomy post-US economic report.

With labour productivity at a huge low and labour costs increasing, unemployment rates have rapidly increased.

The huge surge in unemployment could mean huge overseas employment numbers, which can boost developing countries’ export of workers.

Investors wait until the Fed’s decision to increase the rate hike.

In a meeting of 800 trustees of pension plan boards and hedge funds, most said that the global economy, while having a gloomy outlook, is relatively stable.

The eighth annual EnTrust Investment Summit was a conference closed to the press. However, the fund featured names such as Daniel S. Loeb from Third Point, Nelson Peltz from Trian and Bill Ackman from Perishing Square, among others.

Hedge fund “stars” have attended the gathering. One insider gave BusinessInsider.com the scoop of things happening inside.

Despite capital markets selling off this year, there was no talk of doom and gloom. The US economy is growing, maybe not as rapidly as people would like, but growing nonetheless. There’s job creation happening. Companies are still earning money. It was that sort of assessment.

“It was OK. You know when you come back from a party and it was like, ‘It was OK’? That was the general theme,” the attendee told us.

The consensus is that everyone’s strategy is “wait.” The fund managers feel the US market is strong. The headwinds are China and commodities. The view is that the US market and economy is still strong relative to the other parts of the world. It’s a good place to be.

Yes, there are pockets of concern, with any weakness mostly having to do with energy. If oil stays low that’s a problem. No one there was forecasting $20 though. Some of the fund managers are seeing opportunities in credit, particularly for oil services companies.

As for the election, the consensus was that it’s a scary thing that folks appear to be in favor of Donald Trump, the Republican frontrunner. To the fund managers, it shows how disenfranchised American people are feeling.

Toward the end of one of the panels, the conference was momentarily interrupted by the Hedge Clippers, a group that wants to tax the wealthy elite. It didn’t really faze anyone, though. They took a coffee break while the protesters were escorted from the premises.

Source: BusinessInsider

For its actions in Crimea last 2013, the Russian economy is in recession for a second year after the West economically sanctioned the country. The falling oil prices upon the re-entry of Iran had made it worse for Russia’s oil economies.

It was the fastest noted recession in the last six years since 2015. Russia’s GDP had dropped by 3.7 per cent the previous year. Rosstat, a state-run statistics agency, said Russia’s GDP only grew by 0.7 per cent in 2014.

Russian President Vladimir Putin said in a statement in December 2015 that the economic crisis has peaked. However, analysts, including Capital Economics’ William Jackson said the Russian economy is still “extremely weak.”

The Russian Rouble had performed badly in the market, outperforming Argentinian Peso only by a few margins.

The Russian Central Bank is considering a potential change in interest rates, held up at 11pc for the last three meetings.

Lifting the economic sanctions could only do very little. According to analysts, Russia’s main enemy is the falling prices of oil. Energy industries in the country are struggling to keep production down to avoid extreme surplus.

Iran’s lifting of sanctions and capability to sell their oil to the world market contributes to the oil surplus introduced initially by Saudi Arabia.

Oil is now at $20-30 a barrel.

Google Fiber’s aim is to bring hyper-speed fibre-optic internet connections to the United States. Gabriel Stricker is Google’s newest policy and communications handler for the company. Fibre was initially headed by Dennis Kish in 2010. Under his direction, Google Fiber expanded from Austin to Salt Lake City.

Google intends to bring Fiber to more people as it announces expansions to LA and Chicago. Alphabet, Google’s larger holding company that handles Google’s advertising, Android business and online business. The assignment of Stricker to Google Fiber indicates Fiber’s form into a business from its beginnings as an experiment for faster internet access for consumers.

Alphabet CFO Ruth Porat said most of its efforts went into the Google businesses and they would improve their efforts further as Google continues to expand. Access and Energy will contain Alphabet’s Fiber efforts.

Stricker is not new to Google completely. Being one of the communications group leaders, Stricker had helped Google have a spot in the world’s online industry during its fast-growth days.

Google’s position as a huge global content provider allows everyone to make sense of Google’s offer for super fast internet especially now that net neutrality is becoming a huge issue in many countries.

UK signature businesses Tesco, BT, Marks & Spencer and others have warned British Prime Minister David Cameron that investor confidence will drop if green energy is cut continuously. The businesses argue that they would need a UK government guarantee that businesses can invest in low-carbon technologies.

The businesses said that scaling back solar power, wind energy and low-carbon technologies support risks tech and consumer businesses to investment risks.

“Regular changes to environment policy undermine confidence in investment in infrastructure of all kinds and impact on the UK’s ability to continue competing in the rapidly growing low carbon sector,” the letter warned.

The letter was a response to the long-running £1bn carbon capture and storage (CCS) demonstration being immediately dropped just before the COP21. Hundreds of pounds in foreign investment from the White Rose CCS Scheme in Yorkshire, wherein most investors were businesses, places them at risk of investor troubles.

The government announced early November that it would provide support for new offshore windfarms as far as 2020 to guarantee 20GW of wind power by 2030. But without the industry’s ability to reduce costs to energy due to the lack of government support for low carbon, the objective is a ways off.

According to a state-of-the-nation report in Britain, the British youth are the ones who are hit with the greatest income drop and employment in recent years. The Equality and Human Rights Commission (EHRC) said the youth’s economic independence and success are barred with more obstacles when compared with other age groups.

Aside from young people born into poverty, the UK’s ethnic and socio-economic groups are falling fast.

According to EHRC Commissioner Laura Carstensen:

“While we have made important progress in many areas – and it is important to note and celebrate this – the gateways to opportunity that the Commission identified five years ago remain harder to pass through for some groups such as disabled people, those from poorer backgrounds and women over a certain age.

“It’s great to see the barriers being lowered over the last five years for some people: but during the same period they’ve been raised higher for younger people in particular. Theirs are the shoulders on which the country will rely to provide for a rapidly ageing population, yet they have the worst economic prospects for several generations.”

More Tolerant With Orientation, Inequality Present On Paper

The report indicates that the British have become tolerant with different sexual orientations in all age groups. However, inequality is still present in the workplace, particularly in pay.

People under 34 years old had suffered an average pay shrink down to £6.70 an hour. Men are still twice likely to be a manager, director or a senior official in a company compared to women.

Black people’s pay declined at almost £1.20 an hour. Sikhs now had an hourly pay of £1.90.