Showing posts with label Economy. Show all posts
Showing posts with label Economy. Show all posts

Mar 4, 2021

News | Economy | China: China sets a Conservative Economic Growth At 6% For the Year

China Sets Conservative Economic Growth Target of Above 6%

Bloomberg News

Beijing Gears Up for the Annual National People's Congress

Photographer: Qilai Shen/Bloomberg

China set a conservative economic growth target of above 6% for the year, well below what economists forecast, and outlined ongoing fiscal support to keep the recovery going.

The government will narrow the budget deficit to 3.2% of gross domestic product this year, Premier Li Keqiang said Friday at the opening of the National People’s Congress. While that’s lower than last year’s 3.6% of GDP, it’s above the 3% expected by many analysts, signaling Beijing still sees a need for expanded fiscal policy to support growth this year.


Xi Jinping, left, and Li Keqiang arrive for the opening session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing on March 5.

Photographer: Leo Ramirez/AFP/Getty Images

“In 2021, China will continue to face many development risks and challenges, but the economic fundamentals that will sustain long-term growth remain unchanged,” said Li. “A target of over 6% will enable all of us to devote full energy to promoting reform, innovation, and high-quality development.”

Rebound in China

One of the few v-shaped recoveries globally

Source: National Bureau of Statistics

China’s economy was the only major one in the world to expand last year, aided by the central bank’s injections of liquidity to support businesses, extra fiscal spending on infrastructure and the quick control of coronavirus outbreaks domestically. Economists predict the economy will expand 8.4% this year, partly due to the low base from 2020.

“The tone is very conservative,” said Raymond Yeung, chief economist for Greater China at Australia and New Zealand Banking Group in Hong Kong. The fiscal targets suggest “2021 is a year of tapering.”

China’s CSI 300 Index of stocks fell as much as 2%, poised to enter a technical correction, before paring. Traders blamed the initial losses on a global rout overnight, rather than any negative headlines out of the NPC. China’s government bonds were little changed, while the onshore yuan weakened less than 0.1%.

NPC Targets20202021
GDP growthNoneover 6%
CPIaround 3.5%around 3%
Fiscal deficit (% of GDP)over 3.6%around 3.2%
Special local government bond quota3.75 trillion yuan3.65 trillion yuan
Anti-virus special sovereign bond quota1 trillion yuannone
New urban job creationover 9 millionover 11 million
Surveyed jobless ratearound 6%around 5.5%

The quota for local government bond sales is higher than the 3.5 trillion yuan forecast by analysts as the government continues to pursue proactive fiscal policy. On monetary policy, the government reiterated that it would be prudent, and would keep the yuan basically stable at a reasonable level.

China’s V-shaped recovery alongside a recession in the U.S. and elsewhere puts it on course to become the world’s largest economy by 2028, two years earlier than expected, according to projections by several banks including Nomura Holdings Inc.

What Bloomberg Economics Says...

This is a low bar for this year. Bloomberg Economics forecasts GDP will expand 8.2% this year, reflecting continued progress in the recovery and a low base of comparison last year, when growth slumped to 2.3%.

-- Chang Shu, chief Asia economist

For the full report, click here

Alongside that recovery has been a build-up in debt and worries about asset bubbles, fueling expectations that policy makers will withdraw the monetary and fiscal stimulus unleashed during the pandemic last year.

This year’s meeting of the NPC, China’s main legislature, has added significance because of the release of a new five-year plan covering 2021-2025. Some of the key goals already outlined include strengthening consumer demand, investing in hi-tech industries, and addressing long-term challenges such as an aging population.

— With assistance by Tom Hancock, Lucille Liu, Lin Zhu, Yujing Liu, and Sofia Horta e Costa

(Updates with comment from economist and market reaction)

    Feb 15, 2021

    News | Economy | Japan: Its Shrinks 4.8% in 2020 of Covid.

    Japan's economy shrinks 4.8% in 2020 due to Covid

    BBC News

    Busy shopping street in Tokyoimage copyrightGetty Images

    Japan's economy surged in the fourth quarter of 2020, but it was not enough to keep the country from negative growth for the year.

    The economy beat expectations to grow by 3% between October and December compared to the same period in 2019.

    But growth was considerably slower than in the previous quarter, when the economy expanded 5.3%.

    Japan's economy shrank 4.8% over the full year, its first contraction since 2009.

    The growth figures come as Japan's Nikkei index briefly hit 30,000 for the first time since 1990.

    The world's third-largest economy suffered its worst post-war quarterly contraction between April and June, as the global pandemic hit domestic consumption and exports.

    But consumption and exports, which are both key drivers of the Japanese economy, also fuelled a rebound in the second half of the year.

    Private consumption, which makes up more than half of the economy, rose 2.2% in the final quarter of 2020, slowing from the 5.1% increase in the previous quarter.

    Stronger economic growth globally in the third and fourth quarters also helped Japanese businesses sell more of their products overseas.

    Annualised growth - which assumes the quarter's growth will be maintained for the whole year - was 12.7%, suggesting Japan could be on track for a strong and rapid recovery.

    media captionTokyo's famous Kabuki-za Theatre has been closed for the last five months

    But growth is still fragile, and could be hampered by restrictions aimed at limiting another wave of Covid-19.

    Takumi Tsunoda, senior economist at Shinkin Central Bank Research, expects the recovery to struggle because Japan lags behind western economies in vaccine distribution.

    "The conditions are such that Japan will not be able to avoid negative growth in the first quarter," he told Reuters.

    "There is a high possibility that there will be a repeating cycle of coronavirus infections spreading and being contained this year, which means that consumption is not likely to recover at the expected pace."

    In December, the government announced another round of stimulus aimed at pulling the world's second largest economy out of its slump.

    The 73.6tr yen ($708bn; £530bn) package took Japan's total stimulus spending to around $3tr.

    Feb 14, 2021

    Business | Economy: n a High speed rail do you do yo travel nowhere?

    Is high-speed rail travel on a track to nowhere?

    By Tim McDonald
    BBC News, Singapore

    An artist's impression of one of the planned trains on the high-speed line from Singapore to Kuala Lumpurimage copyrightMy HSR Corp

    image captionThe trains on the cancelled line between Singapore and Kuala Lumpur were due to travel at speeds of more than 200km/h

    It was supposed to be a slick, gleaming piece of transport infrastructure that could shuttle passengers from Singapore to Malaysia's capital Kuala Lumpur in 90 minutes.

    But at the start of this year, the $17bn (£12.5bn) 350km (217 mile) high-speed rail link between the two cities was cancelled for good.

    Malaysia's former Prime Minister Mahathir Mohamad first hit pause on the proposed line after he took power in 2018, as part of a financial belt-tightening push.

    A subsequent coronavirus-fuelled budget crunch then made the project all but irredeemable, with both nations using a joint statement last month to blame "the impact of Covid-19 pandemic on the Malaysian economy".

    Malaysia had proposed cost-cutting changes, but Singapore wouldn't agree, and the deal fell through.

    The planned route of the line

    The story will be familiar to many governments who have tried to build something similar. While supporters are quick to point to the benefits of high-speed rail, the price tag is often intimidatingly large and administrations have a hard time justifying the cost.

    On the face of it a link between Singapore and Kuala Lumpur has a lot of the features that would make for a successful high-speed rail link.

    There's already a great deal of movement between the two cities. Before the Covid-19 pandemic hit, buses would run 24 hours a day and there were more than 30,000 flights between the two conurbations each year, more than any other two cities on Earth.

    The distance for the planned new line was in the right range (typically under 800km) for it to compete with air travel. The current slow train from the Malaysian city of Johor Bahru just across the water from Singapore takes six hours or longer. The bus trip takes as long.

    Analysis suggested that the new rail link would contribute $5.2bn in economic growth to Malaysia and Singapore, and create 111,000 jobs by 2060, according to the Malaysian government.

    But Mahathir Mohamad, who was the country's prime minister until March 2020, was deeply sceptical of those figures. In 2018, he told the Financial Times that the price tag would be $28bn without earning the country "a single cent".

    The Malaysian government ultimately thought the project was so expensive that it was preferable for Malaysia to pay compensation to Singapore for pulling out, as stipulated under the two countries’ agreement.

    Tunnelling machineimage copyrightHS2

    image captionThe UK's HS2 high-speed line scheme is using tunnelling machines to build sections of the route

    High-speed rail projects tend to come with an enormous price tag up front, and they're prone to cost overruns.

    The UK's HS2 scheme - which is being built from London to Birmingham, and then on to Leeds and Manchester - was originally expected to cost £56bn, but that figure has since almost doubled to £98bn.

    The impact of the pandemic on both the UK government's coffers and rail passenger numbers has led to opponents of the scheme saying it is no longer justifiable.

    "The pandemic is going to have a long-term impact on rail passenger numbers, both in the UK and overseas," says transport expert Christian Wolmar.

    "Of course people will eventually go back to rail travel from the current very low levels but 2019 will be a peak for a couple of decades, I'm convinced of that. So is the additional capacity offered by HS2 needed?"

    iChina's Fuxing high-speed bullet trains at the manufacturing line of CRRC Qingdao Sifangmage copyrightGetty Images

    image captionChina has the longest network of high-speed lines

    Prof Bent Flyvbjerg, of Oxford University's Said Business School, is an expert on the management of megaprojects.

    He says that once built, most high-speed rail lines often go on to lose money. "It's a type of infrastructure that's already highly dependent on subsidies," says Prof Flyvbjerg.

    He said there are only a few examples of high-speed rail networks that turn a profit, due to a rare combination of passenger numbers and distance.

    For example, most of the companies that run Japan’s Shinkansen or "bullet train" lines operate at a profit, as do some fast trains on France’s state-owned SNCF network.

    “It only makes sense in high-density areas, and it only makes sense over distances of under 800km," says Prof Flyvbjerg.

    Aerial shot of shinkansen train at speedimage copyrightGetty Images

    image captionJapan's network of bullet trains are profitable

    Many high-speed projects seem to struggle even when they do seem to meet those basic criteria.

    Projects in Ohio, Wisconsin and Florida were scrapped without making much progress, while Brazil’s high-speed link between Rio De Janeiro and Sao Paulo was quietly shelved.

    China has built the bulk of the world’s high-speed rail, with 36,000km of track across the country.

    Even though construction costs are far lower in China, the World Bank says that while all of the country's 15 fastest high-speed lines (300-350km/h) can cover their operating and maintenance costs, only five of the 16 lesser high-speed lines (200-250km/h) do likewise.

    Presentational grey line

    But high-speed rail travel is not solely about a financial return for the operators. It is also about delivering better services and economic growth for the broader community.

    In China, the World Bank puts the economic rate of return at 8%, mostly due to faster travel times. Other benefits include reduced congestion and lower carbon emissions due to fewer cars on the road.

    Some supporters of high-speed rail say it also takes pressure off major cities. If the travel time from a small regional town to the middle of a major hub is reduced from 90 minutes to 30, then it becomes realistic to live there and commute to the bigger city.

    That could mean lower property price rises in larger cities, with expensive infrastructure upgrades in their outer suburbs being replaced by cheaper ones in towns, according to urban planner Marcus Spiller, founder of Melbourne-based consultancy SGS Economics and Planning.

    "It could reshape preferences about where to live and where to conduct business," he adds. "You can create new cities or expanded cities. You can provide housing at a more reasonable cost."

    media captionHow a kingfisher helped reshape Japan's bullet train

    Prof Flyvbjerg says another problem with large-scale, high-speed rail projects is that they take so long to complete that better alternatives might be available before completion.

    For example, the first stage of the HS2 isn’t due to open until 2028 at the earliest.

    He’s hopeful that Elon Musk’s Hyperloop - whereby pods containing passengers travel at great speed through vacuum tubes - might turn out to be a better, more cost-effective alternative to high-speed rail.

    Another alternative might be autonomous electric cars that can travel bumper-to-bumper at high speed.

    "The cars will be able to take people door to door, whereas the high-speed rail doesn't do that," says Prof Flyvbjerg.

    However, Mr Spiller would prefer to use technologies that are a known quantity. "I'd rather back a horse I know can win, instead of a new technology," he says.

    "In terms of base load connections between centres of humanity, high-speed, high-quality rail is here for the foreseeable future."

    travel change location; move, travel, or proceed, also metaphorically More (Definitions, Synonyms, Translation)

    Nov 16, 2020

    News | Business | Economy | Japan: Japan leads economic 'Zoom boom' out of recession


    3-4 minutes - Source: BBC

    Japan's economy has bounced back from its recession with growth of 5%.image copyrightGetty Images

    Japan's economy has bounced back from recession with growth of 5% in the third quarter of this year.

    It had seen its economy shrink during 2020 as lockdowns hit its manufacturing sector and consumer spending.

    The world's third biggest economy is now showing signs of recovery, although some analysts cautioned that further growth is likely to be modest.

    Asian economies are leading the way for a global economic recovery, in what some have called a "Zoom boom".

    This refers to the increase in demand for screens and laptops as more people work from home, and use online meeting platforms like Zoom.

    Asian economies are among the largest producers of laptops, communication equipment and other electronics.

    The Asian region will also get a boost after signing a mega trade deal agreed over the weekend, called the Regional Comprehensive Economic Partnership (RCEP).

    Other signatories include China, South Korea, Australia and Singapore.

    A rise in domestic demand as well as exports have helped drive economic growth in Japan.

    Japan's third-quarter gross domestic product (GDP) growth of 5% is compared to the previous quarter, which saw its economy shrink 8.2%.

    This turnaround is the fastest pace on record for Japanese economic growth. At an annualised rate, assuming this growth continued for 12 months, it represents expansion of 21.4%.

    GDP for the second quarter, covering April to June, was Japan's worst figure since data became available in 1980 - worse than that of the 2008 global financial crisis.

    The bounceback is welcome news for Japan's government which has avoided the tough lockdown measures seen in some other countries.

    The global economy as a whole is expected to contract by 4.4% this year, while the US will shrink by 4.3%, according to the International Monetary Fund.

    However, Asian economies are leading the way when it comes to showing signs of recovery. China remains on track to grow by about 2% this year, the most of any major economy.

    "We call it the Zoom boom," said Rory Green, an economist at research firm TS Lombard.

    Also on Monday, China released new economic data that showed its factory output grew 6.9% in October, compared to the same month last year.


    Earlier this year, Japan unveiled two stimulus packages worth a combined $2.2tn (£1.7tn), including cash payments to households and small business loans.

    Prime Minister Yoshihide Suga, who took over in September, has also instructed his cabinet to come up with another package to boost Japan's pandemic-hit economy.

    Despite this latest quarterly growth, the Japanese economy is still expected to shrink by 5.6% for its full fiscal year, which ends in March 2021. 

    Nov 5, 2020

    News | Business | Economy | Banking: Fed to Stay on Sidelines Amid Election Drama: Decision Day Guide


    Catarina Saraiva

    Federal Reserve Close To Making Its New Inflation Strategy Official

    Photographer: Erin Scott/Bloomberg

    The Federal Reserve is likely to hold off from any major policy changes with the U.S. election still in the balance, even as pressure to act mounts amid diminishing prospects for aggressive fiscal stimulus.

    With no shift expected, officials could still open the door to adjusting their asset purchase program in either the statement issued by the Federal Open Market Committee at 2 p.m. Washington time, or during Chair Jerome Powell’s press conference 30 minutes later.

    “If I were Chair Powell and I was on the Fed, I would want to lay as low as I possibly could. I would not want to be making any sort of news that could be injected into the political fray,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC. “They can certainly do whatever they want or need to do with regard to forward guidance on asset purchases in December, if they’re so inclined.”

    While Joe Biden has a clearer path to the White House than Donald Trump, the race is still too close to call while Republicans look set to retain control of the Senate. Treasuries rallied on the prospect that this would limit the scope for another round of massive fiscal aid.

    Here’s what to watch for:

    Balance Sheet

    If Powell and his colleagues want to do more to support the recovery, their bond buying is the obvious place to look because they’ve already signaled interest rates will be held near zero at least through 2023.

    The Fed’s balance sheet also remains the biggest element of its emergency stimulus measures that is still somewhat open ended. Policy makers said following the last meeting that they would maintain asset purchases, at $80 billion in Treasuries and $40 billion in mortgage-backed securities per month, “at least at the current pace.”

    The Fed's assets exceeded $7 trillion in May and keep rising

    They so far haven’t pegged purchases to a specific end date, attached it to particular economic benchmarks or moved to target later-maturity bonds, and almost none of Fed watchers surveyed by Bloomberg last week saw the central bank changing that this week.

    With the country still in the throes of the pandemic, this leaves the door open for the Fed to ramp up this aid lever when it feels the economy needs it. This may become a useful, if limited, tool to have as parts of the country grapple with a third wave of the virus.

    Forward Guidance

    Congress was unable to agree on additional stimulus before Tuesday’s election, with Democrats preferring a much larger amount of aid than Republicans in the Senate would agree to. Senate Majority Leader Mitch McConnell indicated Wednesday that the chamber’s top priority before the end of the year is passing further relief. With Senate control likely to remain in Republican hands, that bill may skew smaller.

    Most Fed officials incorporated additional stimulus into their forecasts for 2020, the September meeting minutes showed. If no further fiscal support is passed, the chances of a change to the Fed’s asset purchase program before the end of the year and cuts to the central bank’s economic projections would increase.

    Many policy makers have also been vocal about the need for more fiscal stimulus, including Powell, arguing that it would be more effective than monetary policy because many companies need direct grants, not Fed loans.

    FOMC Statement

    The FOMC may tweak its statement to say that it’s seeing new risks to the economic recovery as the virus picks up again. It might also more strongly emphasize that it’s ready to do more to aid the economy, especially as fiscal stimulus remains elusive.

    What the statement and Powell in the press conference following the meeting will be careful to steer clear of, though, is any mention of the election or politics. The Fed will be careful to tread carefully this week as it seeks to maintain an image of independence.

    San Francisco President Mary Daly, who isn’t a voting member of the FOMC this year, will vote at this month’s meeting, taking the place of Minneapolis Fed President Neel Kashkari, who will abstain from the meeting following the birth earlier this week of his second child. Daly will be a voting member of the committee next year.

    Press Conference

    Powell will likely reiterate that the central bank stands ready to do more to help the sputtering U.S. recovery. Central bankers have said for months that the fate of the economy hinges on the path of the virus.

    He can also expect questions about the Fed’s emergency lending facilities, most of which expire at the end of this year. The Fed last week expanded its Main Street Lending Program to include smaller loans, bowing to pressure to make the program more accessible to a broader pool of borrowers.

    With no more fiscal stimulus imminent, Main Street is one of the only pieces of relief available right now, but has to date only lent out $3.7 billion of a potential $600 billion pot. Central bank leaders have also faced criticism for the Municipal Liquidity Facility, which they argue serves as a backstop to the municipal finance market. The program has only bought two bonds.

    Oct 1, 2020

    News | Business | Economy | Britain: 'Millions of jobs' at risk as furlough nears end


    Russell Hotten 

    Media captionOdds of redundancy "very frightening"

    The countdown to the end of the furlough financial lifeline has begun, with employers facing increased costs amid a warning that millions of jobs now hang in the balance.

    From Thursday, the government's contribution to furloughed workers' wages falls.

    It is also the deadline for some firms to issue redundancy notices before the furlough scheme ends on 31 October.

    The current scheme is being replaced by a less generous jobs support package.

    Labour claims that as a result of the government's "flawed" support, almost three million people working for small businesses are at risk of losing their jobs.

    New analysis from the party says that at the start of September an estimated 2.8 million workers in small and medium size firms (SMEs) were furloughed under the current Coronavirus Job Retention Scheme (CJRS).

    Since then new Covid restrictions have been imposed that mean 133,055 SMEs - including in the hospitality and events sectors - cannot operate or are trading at reduced capacity, it says.

    More than a million SMEs are still suffering a fall in turnover, with about 310,000 making less than half the amount they did over the same period last year, the analysis claims.

    Changes coming into effect on Thursday, along with other cost increases for employers, were announced in July.

    The government's contribution towards furlough wages is dropping from 70% to 60%, up to a cap of £1,875 a month. And employers have to pay a minimum of 20% of wages, bringing monthly earnings to at least 80% of salary.

    In August, employers were required to meet the cost of pension contributions and National Insurance for employees placed on the scheme.

    There are also fears that the winding down of the furlough scheme could trigger a new wave of redundancies.

    Thursday is the deadline for employers to issue redundancy notices if they are planning to lay off between 20 and 99 workers before the scheme ends.

    The replacement jobs support scheme shifts more of the financial burden away from the taxpayer and on to employers. But the aim is to subsidise staff to work reduced hours so that employers resist mass redundancies.

    Critics say it will be more expensive to bring back furloughed workers.

    Sonia Hawkins, who runs Disco Equipment Hire, a music and lightening rental service for the entertainment industry, told the BBC the numbers just do not add up.

    She said: "We have next to no income. We've got people on furlough. We would have to bring them back and pay them just to get a subsidy. It's nuts."

    Employment lawyer Merrill April, from CM Murray, acknowledged that the new jobs support scheme would not make much financial sense for some employers.

    She told the BBC: "One of the condition is that employees have to work 33% of their normal hours so, in short, employers will have to pay at least 55% of an employees usual wage where the employee only works 33% of their usual hours."

    However, she said that many firms supported the new scheme and would not rush to cut jobs. Redundancy is expensive, she said, adding that many firms would want to retain people and skills for as long as possible.

    The British Chambers of Commerce (BCC) said it was a critical time for employers, with its members facing cash flow difficulties ahead of what was likely to be a challenging winter.

    BCC co-executive director Claire Walker said further support may be needed.

    "As the Jobs Support Scheme replaces the furlough scheme, and employers are asked to pay more towards staffing costs, the government must stand ready to offer further support to businesses who may be unable to cover their contribution due to continued restrictions and reduced demand."

    'There are no jobs. It's terrifying'

    Events manager Lisa, on furlough since March, was optimistic about returning to work over the next few weeks as Christmas festivities are always good for business.

    But the further restrictions on hospitality and imminent changes to the furlough scheme give Lisa's employer no incentive to bring her back, she told the BBC.

    "Work has all but vanished since Covid. We have gone through a consultation period for redundancies. I've just no idea what is going to happen," said Lisa, who did not want to disclose her surname nor employer for fear of saying anything to jeopardise future work.

    "The latest jobs support scheme does nothing to help those of us on furlough. I have been brought back one day a week, but what is happening now gives my employer no incentive to give me more days," Lisa adds.

    She has asked her employer to take unpaid leave until March, but there has been no decision.

    "I have a lot of experience and have been applying for other jobs. I have searched and searched for different jobs since March. But there's nothing."

    "I can understand what Mr Sunak is trying to do [to help the economy]. But it is so difficult for us. He doesn't seem to have done anything that will help people like me."

    Read more: 'We have next to no income. There is no help.'

    Chancellor Rishi Sunak's latest support measures announced this month have nevertheless received significant support, and were broadly welcomed by the CBI employers' group and union leaders at the TUC.

    The Federation of Small Businesses (FSB) singled out for praise the pay-as-you-go scheme that allows firms more time to repay loans, saying it should give confidence to invest and hire. Business leaders also welcomed new tax cuts and deferrals.

    However, FSB chairman Mike Cherry said: "It's important to remember that small firms have already spent thousands on putting safety measures in place but received no funding to support their efforts to do the right thing."

    And Mr Cherry remains worried about the plight of the newly-self employed and company directors, who he said have received no income support whatsoever.

    He told the BBC: "We are concerned that the chancellor had said nothing on support for those who were left out of the first round of support measures. The government urgently needs to come forward with an emergency relief package for these groups which have dutifully paid their taxes and deserve help too."

    Shadow chancellor Anneliese Dodds said the government had a "sink or swim" mentality.

    "Millions of jobs are at risk because he's forcing small businesses to choose which staff to keep and which to fire. These are viable businesses that just need support to cope with the restrictions the government has imposed on them."

    She said the chancellor's job support changes were "pulling up the drawbridge at the worst possible time".

    A Treasury spokesman said the support has reached, and continue to reach, millions of firms and people - citing loan schemes, VAT deferrals, business rates holidays, bans of tenant evictions, and sick pay rebates.

    "The [new] Job Support Scheme is designed to protect jobs in businesses facing lower demand over the winter due to Covid, and is just one form of support on offer to employers during this difficult period.

    "We're also continuing to innovate in supporting incomes and employment through our Plan for Jobs announced in July, helping employees get back to work through a £1,000 retention bonus and creating new roles for young people with our Kickstart scheme," he said.

    Sep 20, 2020

    Is the world economy recovering?


    Sep 16th 2020

    A recovery is taking shape—but it is extraordinarily uneven

    THE WORST day of the covid-19 pandemic, at least from an economic perspective, was Good Friday. On April 10th lockdowns in many countries were at their most severe, confining people to their homes and crushing activity. Global GDP that day was 20% lower than it would otherwise have been (see chart 1). Since then governments have lifted lockdowns. Economies have begun to recover. Analysts are pencilling in global GDP growth of 7% or more in the third quarter of this year, compared with the second.

    That may all sound remarkably V-shaped, but the world is still a long way from normal. Governments continue to enforce social-distancing measures to keep the virus at bay. These reduce output—by allowing fewer diners in restaurants at a time, say, or banning spectators from sports arenas. People remain nervous about being infected. Economic uncertainty among both consumers and firms is near record highs—and this very probably explains companies’ reluctance to invest (see chart 2).

    Calculations by Goldman Sachs, a bank, suggest that social-distancing measures continue to reduce global GDP by 7-8%—roughly in line with what The Economist argued in April, when we coined the term “90% economy” to describe what would happen once lockdowns began to be lifted. Yet although the global economy is operating at about nine-tenths capacity, there is a lot of variation between industries and countries. Some are doing relatively—and surprisingly—well, others dreadfully.

    Take the respective performance of goods and services. Goods have bounced back fast. Global retail sales had recovered their pre-pandemic level by July, according to research by JPMorgan Chase, another bank. Armed with $2trn-worth of cash handouts from governments since the virus struck, consumers across the world have stocked up on things to make it bearable to be at home more often, from laptops to dumbbells, which partly explains why world trade has held up better than economists had expected. Global factory output has made up nearly all the ground it lost during the lockdowns.

    Services activity is a lot further below its pre-pandemic level, largely because such industries are vulnerable to people avoiding crowds. The number of diners in restaurants remains 30-40% lower than normal worldwide, according to data from OpenTable, a booking platform. The number of scheduled flights is about half what it was just before the pandemic struck.

    The variation in economic performance between countries is even more striking. It is common for growth rates to diverge in downturns. But the size of this year’s collapse in output means that the differences between countries’ growth rates are enormous. On September 16th the OECD, a club of mostly rich countries, issued fresh economic forecasts. Like other forecasters—such as the Federal Reserve, which on the same day published new projections for the American economy—it has become less gloomy in recent months.

    Still, the growth gap between best and worst performers in the G7 group of countries in 2020 is expected to be 6.7 percentage points, far wider than that during the last global downturn a decade ago. Of the big economies, only China is set to expand in 2020 (see article). Some countries, such as America and South Korea, face a downturn but hardly a catastrophic one (see chart 3). Britain, by contrast, looks to be in line for its deepest recession since the Great Frost of 1709.

    Some economists contend that the huge gap between countries is a statistical mirage, reflecting different methods of computing GDP figures. In Britain, for instance, the way statisticians tot up government spending means that school closures and cancelled hospital appointments have a bigger impact on GDP than elsewhere. But this effect is small—the bulk of the fall in output has come from the private sector.

    Instead, performance comes down to three factors. The first is industrial composition. Countries such as Greece and Italy, which rely on retail and hospitality, always looked more vulnerable than, say, Germany. Its large manufacturing sector has benefited from the global goods recovery.

    Second is confidence, which appears to be determined by a country’s experience under lockdown. Britain’s poor economic performance is likely to be related to the government’s poor handling of the pandemic. Britons seem more nervous than other Europeans about venturing outside.

    The third factor is stimulus. America’s lawmakers may be unable to agree on a top-up, but they have already enacted the world’s largest rescue package, relative to the size of its economy. The OECD thinks it will be one of the better-performing rich countries this year.

    What next for the 90% economy? Some authorities have been forced to order further lockdowns. But others may be able to calibrate social-distancing measures better without jeopardising output. That might bring the world closer to, say, a 95% economy. Indeed, the OECD expects global GDP to recover further this year.

    It may be tempting to think that a vaccine, if it could be rolled out widely enough, would quickly restore normality. But there will be scars. Firms’ reluctance to invest today will mean less productive capital in the future. A growing number of American workers believe they will not be returning to their old jobs. Reallocating redundant resources towards more productive firms will take time. The Fed’s rate-setters reckon unemployment will not return to its pre-pandemic rate of 4% until 2023; analysts at Goldman Sachs think it will do so only in 2025, even though they are optimistic that a vaccine will soon be widely distributed. Much as the disease itself has long-lasting effects, the covid-induced downturn will leave the world economy feeling subpar for some time to come.

    This article appeared in the Finance & economics section of the print edition under the headline "The 90% economy, revisited"

    Sep 16, 2020

    News | Business | Economy: What is the UK's inflation rate?


    7-8 minutes - Source: BBC

    Shoppers leaving a clothing store in London Image copyright Getty Images

    Inflation affects everything from mortgages to the cost of our shopping and the price of train tickets.

    The latest UK inflation figures we have, for August, show a big fall to 0.2%.

    But what exactly is inflation and what impact does it have?

    What is inflation?

    Inflation is the rate at which the prices for goods and services increase.

    It's one of the key measures of financial wellbeing because it affects what consumers can buy for their money. If there is inflation, money doesn't go as far.


    It's expressed as a percentage increase or decrease in prices over time. For example, if the inflation rate for the cost of a litre of petrol is 2% a year, motorists need to spend 2% more at the pump than 12 months earlier.

    And if wages don't keep up with inflation, purchasing power and the standard of living falls.

    A little inflation, however, typically encourages people to buy products sooner and makes it easier for companies to put up wages. And both of those things boost economic growth.

    That's why most countries' central banks have an inflation target of between 2% and 2.5%.

    In August 2020, inflation fell sharply from 1% to 0.2%, well below the UK target of 2%. Increasing prices for clothes and games were the main reasons the rate rose for the first time this year.

    How is inflation measured?

    Inflation is measured by the Office for National Statistics (ONS).

    It produces three main estimates of inflation:

    • the Consumer Prices Index (CPI)
    • the Consumer Prices Index including owner-occupiers' housing costs (CPIH)
    • the Retail Prices Index (RPI)

    The CPI is the most commonly quoted figure.

    It looks at the prices of thousands of things consumers commonly spend money on, including cinema tickets, bicycles, and even smart-speakers.

    The prices are weighted, giving more prominence to what consumers spend more on. So, fuel can affect the inflation rate more than the price of stamps, for example.

    CPIH is the ONS's preferred measure. It builds on CPI to include various costs associated with living in your own home, such as council tax.

    RPI, a measure that has fallen out of favour with economists, includes some housing costs but doesn't account for some people switching to cheaper products when prices rise.

    Every year, the RPI figure for July is used to determine how much some train fares will increase by. In 2020 it was 1.6%, which was more than the 1% recorded by the CPI measure.

    Passenger groups have argued for a change in the way fares are determined, as RPI is no longer a national statistic.

    What is it used for?

    Inflation is one key factor the Bank of England considers when setting the "base interest rate". That influences what rate banks can charge people to borrow money, or what they pay on their savings.

    If the Bank of England thinks inflation is likely to be below 2%, it may cut interest rates to lower the cost of borrowing and therefore encourage spending.

    In response to the coronavirus pandemic, the Bank cut interest rates to an historic low of just 0.1% to try to lend support to the economy in March.

    Inflation also has a direct impact on some people's incomes.

    State benefits and many occupational pensions rise in line with CPI. The basic state pension is currently governed by the so-called triple-lock. This means it rises by whichever is the highest - CPI, average earnings or 2.5%.

    As well as the cost of some train tickets, repayments on student loans and bonds issued by government are also pegged to RPI.

    Does anyone benefit from inflation?

    It's important to keep in mind that inflation is only an average rate that looks at certain products.

    The way it affects a household's finances depends on its individual circumstances.

    It can benefit borrowers. For example, anyone with a fixed-rate mortgage benefits from inflation, as it effectively reduces their debt.

    Governments might also benefit as high inflation eats away at the value of their debts.

    However, for savers - including those planning for retirement - inflation cuts how far their money will go in the future.

    Rising prices might mean businesses need to renegotiate the wages of workers, who need more money to get by. If inflation is higher than expected, it can also put companies off investing, if they're uncertain about future costs and demand.

    What is hyperinflation?

    When prices of goods or services are out of control and rise very quickly, that's referred to as hyperinflation.

    It can happen if a government prints more money to pay for its spending. As there's a larger supply of money around, prices increase, and so the government prints more money.

    It creates a spiral that is extremely difficult to get out of.

    The most famous example came when, after World War One, Germany was left with high debts. The government printed more of its own currency to pay them off.

    But the currency lost its value and inflation reached 29,500% a month in October 1923. Eventually, the government had to introduce a new currency to get prices under control.

    Runaway inflation continues to affect countries today.

    In Zimbabwe, inflation peaked at 500,000,000,000% in 2008, which meant the government had to abandon the Zimbabwean dollar. It announced the return to a national currency last June.

    Venezuela has also seen skyrocketing inflation. The annual rate is currently 15,000%, according to the International Monetary Fund.

    Sep 14, 2020

    News | Business | Economy | UK | Wales: Slow recovery and uncertainty in towns after virus

    Sarah Dickins 

    June Phillips
    Image caption June Phillips said people from the valleys were not coming into Abergavenny in the same numbers
    How is the High Street doing after a turbulent period led many to shut down?
    Abergavenny in Monmouthshire is where urban valleys and rural communities meet.
    Living standards here are typical of Wales as a whole, in terms of incomes, jobs, benefits and housing.
    What better place to start to look at this market town than the market?
    Cattle and sheep were sold here until a few years ago but now it has largely bargains on show: cheap meat, cheap clothes and even a pawn broker.
    For 40 years, June Phillips has been growing plants with her brother Steve and selling them at the market.
    They have loyal customers, she says, made up of country people who come into town and valleys people from as far as Merthyr Tydfil.
    When Covid-19 closed the market they delivered to about 100 of their customers. The market has been open again for a month but she says shoppers aren't spending like they did before lockdown.
    "They are buying but it's a lot quieter and people are still very nervous about coming out," she said.
    "We are still delivering to about 50 people who are not confident that it is all over so it's going to take a long time to get back to normal."
    Household finances in Wales have been particularly hit, while Office for National Statistics (ONS) figures out last week showed that, despite shops, pubs and restaurants re-opening, the proportion of people who were actually working at the end of July was lower than before lockdown.
    Surjit Singh has been running a stall for five years but Covid-19 left it shut for five months.
    "We've been going again for three weeks but it's quiet - people are scared to come out to the market. At the end of this year, I'll finish, it's hard work for little money."
    What do we know about Abergavenny?
    • Abergavenny has a population of more than 13,500 - and it has a growing population in the 35 to 64 age bracket, according to the last census in 2011
    • This is the age group which the latest ONS economic survey suggests is particularly vulnerable to pressures on their personal finances
    • Unemployment was around the Wales average but higher than the county average and there were more people in lower-skilled jobs than in Monmouthshire as a whole
    • More people in the town also rated their health as bad or very bad compared to both the Wales and county averages
    • Monmouthshire had 11,300 workers furloughed at the end of July, while 75% of self-employed people in the county had taken advantage of the UK Government's income support scheme, with £2,800 being claimed on average
    'We'll see what happens'
    On to the town centre and what is the feeling there?
    With weddings and big events cancelled with lockdown, there was no-one buying hats nor could they. Alison Tod has been making hats since she was a teenager. She shut up shop and dipped into her savings and had a grant to help towards her rent.
    Alison believes money will be tight but believes there will still be a market.
    "It's a luxury item for many people but in the context of a wedding, we'll always serve the principal guests but perhaps friends might go for something less expensive or not wear a hat?
    "People will find a way to celebrate and want to dress up. We'll see what happens. We have to make sure we have the offer and the product to make it accessible for everybody."

    'We'd help anyone we could'

    Sophie Kumar, of Angel Bakery, starting using her van for a delivery service, selling bread and flour, but also helping out her own suppliers. She delivered salad, fruit and vegetables from a farmer who normally supplied restaurants, and got a brewery involved.
    "We were lucky we were allowed to stay open," she said.
    "We knew there was demand for food, it's not a luxury provision - and with our suppliers, you build up relationships, they're friends. We'd help anyone we could to get their products to the market place."
    She said it had been a positive experience with customers too. They've now taken back almost all their staff.
    During lockdown, deep-fried mozzarella sticks and cheese made by Abergavenny Fine Foods were in demand. The firm has a site in the middle of town and another over the hill in Blaenavon.
    They were selling so much that only a handful of the 200 workforce were furloughed.
    'For us the future is really bright'
    Jason Rees, managing director of Abergavenny Fine Foods, said it has confounded their predictions.
    "We budgeted for a slight slowdown in business but saw the exact opposite - double-digit growth since the start of lockdown. More people are enjoying the big night in - snack food they like at home, in addition we saw growth in our vegetarian and vegan lines.
    "That means all our retailers are demanding more than we can cope with so we're actually increasing staff and capacity, forecasting another 20% uplift next year. For us the future is really bright."
    But that confidence is not shared widely. A recent ONS survey found fewer businesses expected sales to pick up, while the accommodation and food industry consistently expected business to be better than it turned out to be.
    'It's a chain'
    Igino Spuntarelli, owner of Pizzorante and a nearby tapas bar, said it had been a worrying time but his landlord had helped over the rent and they had some savings. His 12 staff had been furloughed but are back.
    The "eat out to help out" scheme also helped a lot, as the lockdown eased and should keep them going for a few months, but they are still not open at lunchtimes.
    He is uncertain about the future.
    "The problem will be if people start to lose jobs they will not go out, and we won't get business and the suppliers won't get business," he said.
    "It's a chain. If someone fails, everybody will be in trouble."
    And that's the fear. What will happen when the furlough scheme ends? Will we see mass lay-offs or small groups made redundant by lots of small employers?
    In the end, are we spending enough to get our high streets through this and make up for months of lockdown . No-one can know the answer - yet.

    Sep 10, 2020

    News | Business | Economy | US Weekly Jobless Stats: Weekly jobless claims miss estimates as employment gains taper

    Jeff Cox

    Weekly jobless claims were worse than expected last week amid a plodding climb for the U.S. labor market from the damage inflicted by the coronavirus pandemic.
    The Labor Department on Thursday reported 884,000 first-time filings for unemployment insurance, compared with 850,000 expected by economists surveyed by Dow Jones. The total was unchanged from the previous week.
    Continuing claims from those filing for at least two weeks rose from the previous week, hitting 13.385 million, an increase of 93,000 from last week’s report and an indicator that the strong jobs improvement through the summer may be tailing off entering the fall.
    The Labor Department changed its methodology in how it seasonally adjusts the numbers, so the past two weeks’ totals are not directly comparable to the reports from earlier in the pandemic. Claims not adjusted for seasonal factors totaled 857,148, an increase of 20,140 from the previous week.
    The four-week moving average for claims through the week of Sept. 5, a number which helps smooth out volatility in weekly numbers, declined 21,750 to 970,750. The moving average for continuing claims fell 523,750 to 13.982 million.
    Claims under the Pandemic Unemployment Assistance program continued to climb, rising more than 90,000 last week to 838,916. The total of those claiming benefits through all programs, though Aug. 22, also rose to just over 29.6 million.
    At the state level, California showed the biggest increase at 17,953 while Florida reported a decline in claims of 9,049, according to unadjusted numbers.
    The U.S. economy is recovering from an unprecedented shock brought on by the virus. Nonfarm payrolls declined by some 22 million at the onset of the crisis, and about half those jobs have been recovered.
    However, even August showed some slowing in those gains, even though the 1.4 million growth was better than Wall Street estimates.
    Economists worry that a resurgence of the virus in the fall could slow or reverse some of that progress. Recent moves in Pennsylvania and New York to ease restrictions on indoor dining have raised hopes that the hospitality industry can begin to recover, though bars and restaurants remain under substantial restrictions in most of the Northeast.

    Aug 10, 2020

    News | Business | Economy | Pandemic | France: : French economic activity stuck 7% below pre-Covid 19 level

    Alice Woodhouse, George Russell, Sarah Provan, Adam Samson, Philip Georgiadis, Harry Dempsey

    Royal Caribbean posts $1.6bn loss as pandemic halts sailings
    Royal Caribbean reported a wider than expected loss in the second quarter as the cruise operator suspended its sailings as a result of the coronavirus pandemic.
    Royal Caribbean revenues fell to $175.6m down from $2.8bn in the same quarter a year ago, but exceeded Wall Street expectations. The company suspended cruises from March 13 and had no voyages in the second quarter. The Cruise Lines International Association (CLIA), an industry group, has called for members to suspend operations until the end of October.
    "The Covid-19 pandemic is posing an unprecedented challenge to our industry and society," said chief executive Richard Fain.
    That pushed Royal Caribbean to a net loss of $1.64bn or $7.83 a share, compared with a profit of $472.8m or $2.25 a share in the same period a year ago. Adjusting for one-time items it reported a loss of $6.13 a share, steeper than analysts' expectations for a loss of $4.82 a share.
    While the bookings for the remainder of the year have been hit by the coronavirus-driven suspension, the company said 2021 is trending well, even though it is early in the cycle.
    Royal Caribbean expects to burn about $250m to $290m of cash per month "during a prolonged suspension of operations".
    The cruise operator, whose shares are down more than 60 per cent this year, said it expects to report a loss in the current quarter and the full year.
    Harry Dempsey
    US equities edge higher even as US-China spat escalates
    Gains for global stocks were held back on Monday as escalating tension between China and the US weighed against hopes of further economic stimulus.
    Beijing has said it will sanction 11 US citizens in response to similar measures from Washington, intensifying the friction between the world’s two largest economies after the introduction of a tough security law on Hong Kong.
    US stocks edged higher with the S&P 500 rising 0.2 per cent at market open, as the benchmark index comes within touching distance of its February peak. The tech-heavy Nasdaq rose by the same amount.
    London’s FTSE 100 rose 0.4 per cent while Europe’s benchmark Stoxx 600 index gained 0.5 per cent by the afternoon.
    Traders were keeping an eye on manoeuvres in Washington and their implications for more US economic support measures. President Donald Trump on Saturday bypassed lawmakers and signed executive orders aimed at cushioning the economic blow from the coronavirus crisis.
    Investors have largely brushed off headwinds including rising US-China tensions and stalled negotiations over fiscal support in Washington to push shares higher this month.
    Mamta Badkar
    Marriott misses sales forecasts as hotel chain swings to quarterly loss
    Hotel chain Marriott has said that its full recovery from the coronavirus pandemic "will clearly take time" as revenues missed forecasts and the group was pushed to a wider than expected quarterly loss.
    Second-quarter revenue fell 72 per cent year on year to $1.46bn, missing Wall Street expectations for $1.68bn. Revenue per available room, an industry standard for measuring growth, fell 84.4 per cent globally.
    The Maryland-based group swung to a net loss of $234m, or 72 cents a share, compared with a profit of $232m, or 69 cents a share, a year earlier. Adjusting for one-time items, the company reported a loss of 64 cents a share, steeper than analysts' forecasts for 42 cents a share.
    "While the full recovery from Covid-19 will clearly take time, the current trends we are seeing reinforce our view that, when people feel safe travelling, demand returns quickly," the group said.
    Ninety one per cent of Marriott's hotels worldwide have reopened.
    "We are seeing steady signs of demand returning," said chief executive Arne Sorenson. Revenue per available room, which was down 90 per cent in April, improved and was off 70 per cent in July. Worldwide occupancy rates improved to nearly 34 per cent for the week ended August 1 compared with a low of 11 per cent in April.
    Notably, the company said it was seeing more "widespread business demand" in Greater China, the region that led the recovery and originally saw a rebound in travel demand.
    "The improvement we have seen in Greater China exemplifies the resilience of travel demand once there is a view that the virus is under control and travel restrictions have eased," Mr Sorenson said.
    Harry Dempsey
    French economic activity 7% down in July
    Victor Mallet in Paris
    French economic activity in July was running at 7 per cent below its pre-crisis level as a result of the coronavirus pandemic, a slight improvement on the 9 per cent fall-off in June, according to the latest report from the country’s central bank based on its latest survey of businesses.
    In the second quarter as a whole, French GDP was down 13.8 per cent, the Banque de France said.
    “Activity continued to recover in July, in industry as well as in services and construction, but at a slower pace than in the previous month,” the bank said.
    Activity in August was expected to be stable or improve slightly, confirming predictions of a “birdwing"-shaped recovery marked by a sharp economic upturn after the lockdown ended in May, followed by a second, shallower phase of recovery.
    Harry Dempsey
    Barrick basks in glow of record gold prices
    Henry Sanderson in London
    Barrick Gold's second-quarter profit beat forecasts to more than double, in the wake of a record rally in the yellow metal's prices.
    The world’s second-largest gold miner reported adjusted profit of $415m, or 23 cents a share, up from $154m a year earlier. That beat analysts’ expectations of 19 cents a share. Revenues rose 48 per cent from a year earlier to $3.06bn.
    Gold prices have rallied by 34 per cent this year to a record above $2,000 a troy ounce driven by depressed bond yields and fears over the impact of Covid-19 on the global economy. Shares in Toronto-based Barrick have risen 60 per cent this year to trade at C$38.60.
    Barrick said its gold production fell 15 per cent in the second quarter from a year earlier to 2.4m ounces due to coronavirus-related disruptions in Argentina. Still Barrick said it was on track to meet its annual guidance of between 4.6m to 5m ounces of gold.
    Barrick said its cost of gold production rose 19 per cent to an all-in sustaining cost of $1,031 an ounce.
    Harry Dempsey
    US virus cases breach 5m mark
    Total coronavirus cases in the US has topped 5m as the country worst hit by Covid-19 has struggled to get the pandemic under control.
    Johns Hopkins University data showed that cumulative cases reached the milestone on Sunday while the death toll was in excess of 162,000 people in America.
    The volume of daily cases has been decreasing slowly across the country but remains elevated at about 50,000 and the daily death count from the virus has risen steadily to average more than 1,000 per day over the past week, according to calculations by the Financial Times.
    California, Texas and Florida are the three states that have been recording the highest number of daily cases and deaths over the past month, although case numbers appear to be trending downwards.
    Efforts to push through more stimulus in the US to prop up the economy, which has been devastated by the pandemic, have run into a roadblock. President Donald Trump bypassed lawmakers on Saturday by signing orders following the collapse of talks with Democrats over a fifth Congressional stimulus package.
    Adam Samson
    Saudi Arabia to launch late-stage trial of Chinese-developed vaccine
    Ahmed Al Omran in Jeddah
    Saudi Arabia will soon start Phase III clinical trials for a Covid-19 vaccine developed by China’s CanSino Biologics, the kingdom’s health ministry said.
    The vaccine candidate will be tested alongside a placebo on 5,000 volunteers in the capital Riyadh as well as the cities of Mecca and Dammam, according to a statement published by the Saudi state news agency.
    CanSino, which is collaborating with the Chinese military, in March became the first company in the world to begin clinical trials of a vaccine based on adenovirus that stimulates an immune response using a chemically weakened common cold to carry genes from the new coronavirus into the body.
    Several companies in the US, UK, Germany and China are currently developing their own vaccine, but none has been approved for commercial use yet.
    The kingdom has reported more than 288,000 confirmed cases and 3,176 deaths of coronavirus.
    Harry Dempsey
    Second-wave fears fail to damp optimism over Europe’s recovery
    Investor sentiment towards the eurozone economy brightened in August for the fourth consecutive month with the easing of coronavirus-related restrictions likely to sustain an economic improvement.
    The overall index for the bloc climbed 4.8 points to minus 13.4, a slower pace of improvement than last month, although the increase was larger than economists polled by Reuters had been expecting, a measure produced by Frankfurt-based research house Sentix showed.
    A negative score indicates a larger proportion of institutional and private investors reporting a bad economic situation than those reporting a good one. The score has climbed from its low of minus 42.9 in April.
    Investor sentiment towards the current economic situation for the single currency zone improved to minus 41.3, up 8.2 points. Patrick Hussy, managing director of Sentix, said “there is still no rejoicing in absolute terms” since the figure points to a recession in the third quarter but “the recovery is progressing”. Most economists predict a sharp rebound with growth of more than 6 per cent in the three months to September.
    The forward-looking expectations in the index were virtually unchanged from July at 19.3, indicating that investors have not become more fearful about the economic impact of a second wave of coronavirus infections in Europe yet.
    “It is remarkable in this context that a second wave of corona infections does not leave a new fear reflex in the economic indicators,” Mr Hussy said.
    Investor sentiment towards Germany recovered at a much faster pace than other European countries, partly due to a strong rebound in orders for German manufacturers, Sentix said.
    Adam Samson
    Turkish lira falls anew after hitting record low last week
    The lira has struck new lows as the week kicks off with many analysts doubtful that Turkish authorities will be able to steady the currency without significant rate increases.
    In early London trading, the lira dropped about 0.7 per cent against the US dollar to TL7.338, following last week's 4.5 per cent tumble.
    Turkey's central bank and bank regulator have taken a series of steps to drain the abundance of lira in the market and make it more difficult to bet against the currency in an apparent attempt to ease the selling pressure.
    President Recep Tayyip Erdogan on Friday described the fall as "temporary" and said it was caused by the coronavirus pandemic and last week's deadly explosion in Beiruit. But investors and analysts have said Turkey's drastic rate cuts, which have left the country's main lending rate well below the level of inflation, have heaped downward pressure on the currency.
    "No cocktail of these banking system tinkering or partial capital control measures is capable of turning the lira trend around. Harsher capital controls can buy some more time, perhaps," said Tatha Ghose, currencies analyst at Commerzbank.
    "But the underlying weakness arises out of an inconsistent monetary policy framework, featuring no inflation targeting – and this will continue to build up stress in the background until it ultimately forces fundamental change."
    The latest fall comes also comes as Turkey's attempt to prop up the lira, effectively pegging it at about TL6.85 to the dollar since mid-June, appeared to be coming undone.
    Goldman Sachs estimates the central bank has spent at least $65bn in the intervention this year, far beyond the $40bn that it spent from its foreign-currency reserves in the whole of last year.
    Sarah Provan
    Superdry sets up additional £70m funding
    Superdry has agreed an additional £70m funding from its lenders to help shore up its financial position after the coronavirus crisis has compounded its troubles.
    The asset-backed lending facility, agreed with its lenders HSBC and BNP Paribas, will be extended until January 2023 and replaces one that was due to expire a year earlier, the clothes retailer said on Monday.
    Trading over the first three months of its financial year showed a better performance than Superdry's initial expectations, even as the disruption from Covid-19 pandemic was knocking its performance compared with a year earlier.
    The group showed £57.8m cash on its balance sheet as of August 6, up from the £39.8m it reported in May and £2.1m a year earlier, it said in its first-quarter trading statement.
    Group revenue for the 13 weeks to July 25 fell 24.1 per cent from a year earlier as store closures during coronavirus-related lockdown measures hit the clothing retailers. Almost 95 per cent of its stores have reopened but its store revenue in the three months is down 58.1 per cent from a year earlier. That is about 32.3 per cent on a like-for-like basis.
    "The actions we have taken to date have greatly strengthened our cash position, which together with our new ABL facility, give us the flexibility to execute our current plans and to secure our recovery,” chief executive Julian Dunkerton said.
    I’m confident we can reset the brand and deliver on our transformation plans.
    Superdry was struggling even before the pandemic struck and forced the government to order a number of non-essential stores to be closed from late March. In January the clothing group said its annual profits could be wiped out following a disappointing performance over the Christmas trading period, sending shares in the fashion brand down almost a fifth.
    Mr Dunkerton, the co-founder of Superdry, has pledged to return to the company’s original design philosophy — producing colourful, Japan-influenced clothing — and to increase product choice and reduce discounting. He returned as chief executive last year after a boardroom coup.
    Harry Dempsey
    German companies expect Covid-19 to affect public life until April
    German businesses expect restrictions on public life to continue for another 8.5 months on average, as the pace of the economic recovery from the pandemic in Europe’s largest economy has shown signs of slowing down.
    Companies in the leisure industry anticipate restrictions to last for the longest, a July survey by Ifo, a Munich-based think-tank showed. Those focused on sports, amusement and recreational activities forecast a further 13 months of measures to comply with, which would mean restrictions extend until August next year.
    At the lower end of expectations, postal and courier services only expected restrictions to be in place for little over half a year.
    Many businesses have reported uncertainty until the year-end but the survey sheds light on businesses’ expectations over the longevity of coronavirus-related restrictions into 2021.
    But early signs of a second wave of the virus across Europe have grown stronger in August. Daily coronavirus cases have risen to 857 on average in the past week in Germany, a third higher than the end of July, leading to the tightening of quarantine requirements for travellers from certain countries and the closure of a handful of schools to stop the virus spreading.
    George Russell
    Asiana sale in doubt as consortium issues new demands
    Song Jung-a in Seoul
    The Won2.5tn ($2.1bn) sale of troubled Asiana Airlines, South Korea’s second-biggest airline, to a local property developer may fall apart as the deal signed in December has been stalled for months with the aviation industry hit hard by the coronavirus pandemic.
    The Hyundai Development-Mirae Asset consortium has dragged its feet on the acquisition since April and is now demanding an additional 12 weeks of due diligence on the debt-laden carrier, citing the changed business environment due to the pandemic.
    The consortium has already completed seven weeks of due diligence on Asiana. Main creditor Korea Development Bank and Kumho Asiana, which controls the airline, are opposed to the consortium’s new demand.
    Leaders of Hyundai Development, KDB and Kumho Asiana Group will meet on Monday to narrow their differences before Tuesday’s deadline.
    Creditors hope that surprisingly strong Asiana earnings will renew the appetite of Hyundai Development to buy the airline, which swung to a net profit of Won116.15bn in the April-June quarter from a net loss of Won183.14bn a year earlier.
    Asiana has suspended most of its international flights since March amid border closures and entry restrictions but its strong cargo business has offset weak travel demand as air freight of memory chips and mobile devices increases.
    Its bigger domestic rival Korean Air also reported a second-quarter operating profit of Won43.7bn last week as cargo sales have doubled to Won1.23tn.
    George Russell
    British bosses take pay cuts ahead of pandemic
    Daniel Thomas in London
    Pay for chief executives at the 30 largest companies in the UK fell almost a tenth last year, marking a five-year low for investor pay revolts as boards kept stricter watch on remuneration.
    Among the FTSE 30 listed companies, CEO pay dropped more than 7 per cent to £5.9m in 2019 on a median basis, although wages for top executives across the wider FTSE 100 were static at about £3.7m.
    Pay across chief financial officers in the FTSE 100 dropped about 12 per cent to £1.9m, according to the annual executive remuneration report by Deloitte.
    Read more here
    George Russell
    NZ plans to set up travel corridor with Cook Islands
    The New Zealand government announced on Monday it hopes to establish a coronavirus-free travel corridor with the Cook Islands, in the South Pacific, by the end of this year.
    Jacinda Ardern, New Zealand’s prime minister, said her cabinet met on Monday to discuss a draft agreement, adding:
    We are working studiously to get this ready but we will make sure it's based firmly on assurance and we don't run the risk of exporting and importing Covid-19.
    New Zealand has gone 101 days without a local Covid-19 infection, while the Cook Islands, 3000km north-east of Auckland, have not experienced any positive cases.
    About 17,000 people live in the self-governing archipelago, which covers 1m sq km. Many islanders live in New Zealand, and the Cooks are a popular holiday destination for New Zealanders.
    The Cook Islands became a British protectorate in 1888, but oversight was transferred to the then colony of New Zealand in 1901. Wellington is now responsible only for the islands' foreign affairs and defence.
    George Russell
    CanSino to launch final-stage vaccine trial in Saudi Arabia
    Christian Shepherd in Beijing
    One of China’s leading vaccine makers, CanSino Biologics, is planning its final-stage safety trials in Saudi Arabia, as Chinese companies push Covid-19 vaccine development beyond the country's borders.
    Saudi Arabia's health ministry announced over the weekend that plans were being drawn up for CanSino to conduct a trial across the cities of Riyadh, Dammam and Mecca.
    The trial is expected to involve 2,500 healthy participants who will be given a low dose of the vaccine and a second 2,500 will be given a placebo, and will begin “very soon,” the ministry said on its website.
    The announcement brings CanSino up to speed with domestic rivals China National Pharmaceutical Group, or SinoPharm, and SinoVac Biotech, which are conducting final-stage trials in the United Arab Emirates and Brazil, respectively.
    George Russell
    Western Union explores using cash for acquisitions
    Laura Noonan in Dublin
    Western Union, one of the largest digital platforms for money movement in the world, is planning to use opportunities arising from the coronavirus crisis to buy weaker rivals, according to chief executive Hikmet Ersek.
    Second-quarter earnings released last week showed Western Union had $1.2bn of cash on its balance sheet at the end of June. "We have a good cash flow position even through Covid-19, and some competitors struggle," he told the FT.
    Pre-tax profits for the quarter came in at $193m, down 74 per cent year on year. This was partly due to the coronavirus crisis and also because the second quarter of 2019 included a big gain on an asset sale.
    Read more here
    George Russell

    India records more than 1,000 deaths in a day for 1st time
    Amy Kazmin in New Delhi
    India recorded an all-time high of more than 1,000 daily coronavirus deaths on Sunday, a sharp increase over last week’s average of about 860 daily deaths.
    The 1,013 new deaths — the first four-digit daily total — pushed India’s aggregate known coronavirus fatalities to more than 44,400, the fifth-highest death toll from the pandemic.
    The true death toll is believed to be far higher as victims who die without accessing health care, or being tested are not counted in the total, and the deaths of some coronavirus patients have been attributed to their pre-existing health conditions.
    India is now detecting more than 60,000 new infections every day, significantly more than the new cases currently being found in the US and Brazil, which have the world’s two highest coronavirus caseloads.
    India’s confirmed caseload has now risen to 2.2m infections, the third-highest in the world.
    The steady rise in the daily detection of new cases comes as India is pushing to ramp up its low testing levels to a goal of 1m a day. At present, India is carrying out about 700,000 tests a day.
    But its total tests of just 17,450 per million pale in comparison to the 62,000 per million carried out in Brazil or the 197,500 per million conducted in the US.
    George Russell
    Sportspeople should set Covid-19 standards: top medic
    One of Australia's top doctors has called on sporting stars to be role models after rugby league authorities disciplined three players for breaching coronavirus movement restrictions at the weekend.
    Brisbane Broncos forward Tevita Pangai was dropped after he attended the opening of a barber shop.
    The suspension by the National Rugby League follows an announcement by the Newcastle Knights that two unnamed players had broken biosecurity guidelines.
    "We have two players now on Covid hold as a result of a potential breach," a Newcastle spokesperson said.
    Nick Coatsworth, one of Australia's deputy chief medical officers, said players should set examples for their fans and said it was "unfortunate that there's these occasional high-profile situations where people aren't doing the right thing".
    He said the majority of players in the NRL and the Australian Football League, the Australian rules body, are “great” role models. "They're showing us how things are done."
    George Russell
    Chinese stocks drop after Washington unveils sanctions
    Hudson Lockett in Hong Kong
    Chinese stocks fell on Monday as investors weighed up US sanctions targeting China and Washington’s attempts to extend economic support measures.
    China’s CSI 300 benchmark of Shanghai- and Shenzhen-listed shares fell 0.8 per cent and Hong Kong’s Hang Seng dropped 1 per cent in early trading on Monday.
    The declines came after US President Donald Trump on Friday imposed economic and financial sanctions on 11 Chinese and Hong Kong officials in response to Beijing imposing a sweeping national security law on the semi-autonomous territory.
    The officials subject to sanctions include Carrie Lam, Hong Kong’s leader.
    Washington on Friday also issued orders banning US companies from dealing with Tencent’s WeChat messaging app and ByteDance, the Chinese owner of popular video app TikTok.
    Tencent fell another 3.2 per cent in Hong Kong after closing 5 per cent lower on Friday. Shares in Alibaba, a Chinese ecommerce group that trades in Hong Kong, dropped 2.8 per cent despite not being directly affected by the US orders.
    Elsewhere in Asia on Monday, South Korea’s Kospi index added 0.9 per cent while Australia’s S&P/ASX 200 added 1.3 per cent. Markets in Japan were closed for a public holiday.
    Read more here

    George Russell
    Asia’s garment workers lose out on $6bn in pandemic
    Patricia Nilsson in London
    Millions of garment workers in Asia have been deprived of $6bn in wages after the world’s biggest fashion brands cancelled or delayed orders and withheld payments because of the pandemic, a labour rights group has warned.
    Many workers for suppliers to global fashion brands retailers including Hennes & Mauritz, Topshop and Gap, have allegedly received only partial or no wages at all in the three months ending in May, according to a report by labour union alliance Clean Clothes Campaign.
    The average worker in the 50m-person strong Asian supply chain for garments has lost about a fifth of pay, representing roughly $5.8bn in unpaid or lost wages, based on data gathered by the group.
    Read more here
    George Russell
    Pork and vegetables lead China food inflation higher
    Christian Shepherd in Beijing
    Consumer prices in China rose during July due to higher food costs, while factory activity remained subdued, as widespread flooding slowed efforts to boost the economy following a coronavirus-induced slump.
    Food prices soared 13 per cent year on year during the month, pushing the consumer price index up 2.7 per cent, the National Bureau of Statistics said on Monday.
    Pork prices, still reeling from an outbreak of African swine fever, led the surge. They rose 86 per cent while fresh vegetable prices gained 8 per cent.
    Flooding across southern China throughout June and July has hit a number of important agricultural regions, just as they began to recover from epidemic-induced lockdowns.
    The producer price index, a measure of the cost of goods at factory gates, fell 2.4 per cent year on year in July.
    Both the CPI and PPI numbers were slightly ahead of forecasts by economists polled by Bloomberg.
    The Chinese economy’s recovery from the pandemic has been hit by repeated outbreaks of Covid-19, as well as weak demand in global markets and rising tensions with Washington.
    George Russell
    S Korean small investors hit by plunge in Brazil’s real
    Song Jung-a in Seoul
    Retail traders in South Korea face big losses after bets on billions of dollars of Brazilian government bonds soured, prompting calls for regulators to better protect mom-and-pop investors from risky products.
    Investors in the Asian country have ploughed about Won8tn ($6.8bn) into treasuries issued by the South American nation, only to see the assets plummet in value after the Brazilian currency nosedived during the coronavirus pandemic.
    The fiasco has renewed concerns over the lack of regulatory oversight of the booming market for exotic, and often volatile, financial products promoted to retail traders and retirees, some of which have been subject to spectacular meltdowns.
    Read more here
    George Russell
    China reports 14 local and 35 imported Covid-19 cases
    China reported 49 new Covid-19 cases to Sunday night, the National Health Commission announced on Monday.
    Of those, 35 were imported, while all 14 local cases were recorded in the western Xinjiang region.
    So far, China has officially recorded 84,668 confirmed cases of coronavirus, including 4,634 deaths.
    The country also reported 31 new asymptomatic patients on Monday, compared with 11 a day earlier.
    George Russell
    Singapore completes migrant worker dormitory testing
    Singapore’s health ministry announced on Sunday it had completed Covid-19 testing of the country’s 300,000 migrant workers living in dormitories.
    “The inter-agency task force has completed the testing of all workers in the dormitories on August 7 and some of the test results are still being processed,” a ministry statement said.
    There are about 23,500 workers who are still serving out their isolation period in quarantine facilities, authorities said.
    “These workers will be tested when their isolation ends, and we expect the case counts to remain high in the coming days, before tapering down thereafter,” the statement added.
    The ministry said that of the 175 new Covid-19 cases reported in Singapore on Sunday, 171 were found in worker dormitories, and 98 per cent “are linked to known clusters, while the rest are pending contact tracing”.
    George Russell
    JPMorgan reveals sharp shift to electronic bond trading
    Tommy Stubbington in London and Colby Smith in New York
    The coronavirus crisis has ushered in a “dramatic” shift in the world’s largest bond market away from trading by phone towards electronic execution, according to a report by JPMorgan Chase.
    Over the past two years, roughly 50 per cent of trading in the US Treasury market has been carried out electronically, according to the report by JPMorgan’s Treasury trading desk, seen by the Financial Times.
    That figure surged to 70 per cent in April and has continued to rise even as the most acute market stress eased, hitting 77 per cent in June. The data suggest that “the way these securities trade is starting to change dramatically”, the report said.
    Read more here
    George Russell
    Australia braces for more bad news after deadly weekend
    The Australian state of Victoria recorded 29 coronavirus deaths over the weekend, although one of the country's top medics indicated the state was gaining control of the surge.
    The country’s second most populous state recorded its deadliest day of the pandemic on Monday, with 19 fatalities, following 17 on Sunday and 12 on Saturday.
    One of Australia's deputy chief medical officers, Nick Coatsworth, said on Friday that Victoria appeared to have reached the peak of the outbreak.
    “It appears we’re in the plateau but we’re looking for the inflection point that tells Victorians that their efforts are being rewarded,” Dr Coatsworth said.
    But the state’s premier, Daniel Andrews, said Sunday's 394 new cases, the lowest single-day tally in 12 days, should not be interpreted too positively.
    Mr Andrews on Monday announced 322 new cases, a two-week low, but said he could not forecast when the state's strict lockdown, which began on July 9, would end.

    Police in Melbourne, the state capital and Australia’s second-largest city, were out in force at the weekend, pictured, checking residents and preventing a planned anti-lockdown rally on Sunday in the central business district.
    In New South Wales, two schools were closed on Monday after several students tested positive among 14 new cases in the state.
    Queensland reported just one new case — an arrival from overseas in hotel quarantine — as the state passed 200 days without a local infection and prepared to lift restrictions on visitors to aged-care homes.
    "That's really good news for Queensland," said premier Annastacia Palaszczuk, adding that she hoped the state's residents would “support the tourism operators, cafes and businesses right across Queensland”.
    Queensland closed its borders at 1am on Saturday to visitors from NSW and the Australian Capital Territory, which surrounds Canberra.
    George Russell
    Chinese rating agencies boost local government vehicles
    Sun Yu in Beijing
    Chinese rating agencies have upgraded a record number of local government bond issuers even as fiscal income plunged after the coronavirus outbreak, in a move analysts say could lead to a wave of defaults.
    The corporate credit ratings of 100 local government financing vehicles, the main lenders behind China’s infrastructure building boom, have been raised since January, according to Wind, a financial data provider.
    This marks a sharp rise, with just 17 reporting a rise in the previous 10 years combined. The shift comes despite local governments reporting a 7.9 per cent drop in revenues in the six months ending in June.
    Read more here
    George Russell
    Trade shows await a world where people can mingle
    Patricia Nilsson in London and Wang Xueqiao in Shanghai
    The reopening of China’s economy and gradual easing of restrictions in many countries has provided a sliver of hope for the global events industry — valued at roughly $30bn by Citi — with months of preparation required to organise the largest shows.
    But the spectre of local lockdowns — as have been imposed in Melbourne and Manchester — continued infections in the US and several European countries, and reluctance by companies to make staff travel because of health concerns mean when and how the sector will recover is far from clear.
    Informa chief executive Stephen Carter insists the group, the world’s largest events company which last year organised 450 gatherings, can ride out the storm.
    Read more here
    Alice Woodhouse

    Asia-Pacific stocks make a cautious start in early trading
    Asia-Pacific stocks had a cautious start to the week after US President Donald Trump issued executive orders to aid the economy following the collapse of coronavirus stimulus talks in Congress.
    South Korea’s Kospi was flat, Australia’s S&P/ASX 200 added 0.2 per cent and futures tip the Hang Seng in Hong Kong to open 0.2 per cent lower. Japanese markets are closed for Mountain Day.
    Mr Trump bypassed lawmakers and signed four presidential orders to help the economy on Saturday after talks over a Congressional coronavirus rescue package collapsed.
    Democrats dismissed Mr Trump’s orders as “weak and unconstitutional”.
    On Friday, the S&P 500 closed up 0.1 per cent, after the non-farm payrolls report showed the US added 1.8m jobs in July, slightly above the 1.6m forecast.
    S&P 500 futures were down 0.1 per cent.
    George Russell
    UK jobs outlook likely to be weak in 3rd quarter: survey
    The British employment outlook is likely to remain weak in the third quarter of 2020 due to the coronavirus pandemic, according to a survey released on Sunday by the Chartered Institute of Personnel and Development and the Adecco Group, a Swiss-based temporary staffing supplier.
    A third of UK-based companies expecting to cut jobs in the July to September period, the data showed. “This is the weakest set of data we’ve seen for several years,” said Gerwyn Davies, an adviser at the CIPD, a professional body for British human resources personnel.
    The survey found employers are exploring a variety of options to stave off or minimise redundancies during the pandemic.
    The results showed 42 per cent of companies have implemented recruitment freezes, with some sectors particularly affected. Nearly two-thirds of hospitality companies have frozen hiring, as have more than half of business services (54 per cent) and information technology providers (52 per cent).
    Some sectors have implemented pay cuts, with construction companies (44 per cent of respondents), business services (30 per cent) and hospitality (29 per cent) most likely to do so.
    Alice Woodhouse
    US reports 51,000 new coronavirus cases on Sunday
    The US reported 51,291 new coronavirus cases and 616 new deaths on Sunday, coming in above the tally for the same day a week earlier.
    There were 48,694 cases reported last Sunday. A weekend reporting effect means the number of cases and deaths recorded for Saturday to Monday tend to be lower than for the rest of the week, according to the Covid Tracking Project.
    Tropical storm Isaias also caused a fall in testing earlier in the week and technical issues in some states, which could also explain the increase for Sunday, the Covid Tracking Project said.
    The storm battered the US east coast, killing at least nine people and leaving hundreds of thousands without power.
    Many American students have begun moving into university dormitories, such as at Syracuse University in New York state, pictured, for the new academic year, despite fears of further infections.

    George Russell
    Aramco sticks to dividend despite earnings plunge
    Anjli Raval and Andrew England in London
    Saudi Aramco stuck by plans to pay out $75bn in dividends this year despite a 73 per cent drop in second-quarter earnings and surging debt levels, as the state energy group bets on a rebound for the pandemic-hit oil sector.
    Like its international peers, Saudi Aramco has had a brutal year. Government imposed lockdowns to curb the spread of coronavirus dramatically hit oil demand and prices, leading to a fall in net income of $6.6bn in the three months to June 30, compared with $24.7bn in the same period a year ago.
    It marks a drastic change in fortunes from December, when it raised a record $25.6bn in its initial public offering and became the world’s most valuable listed company — a status it recently lost to technology giant Apple.
    Read more here
    George Russell
    New York state calls for $30bn in economic aid
    New York state needs $30bn in aid over the next two years to repair its coronavirus-ravaged economy, political leaders told the state’s Congressional delegation.
    Governor Andrew Cuomo and other state figures wrote to New York’s representatives in Washington on Friday calling for urgent assistance.
    The letter specifically called for aid to maintain New York City as a global trade and transport hub, noting the Metropolitan Transportation Authority — which provides transit services in 12 counties in New York, including the city, and two in Connecticut — recently posted a $12bn deficit.
    “Additional assistance is necessary to sustain its daily operations at a level sufficient to meet the needs of the greater metropolitan area, and indeed to secure its presence as an economic engine in communities in every corner of the state,” they wrote.
    The Port Authority of New York and New Jersey “has suffered greatly over this period as their receipts have been curtailed”, the letter stated. The authority needs $3bn to continue improvements at John F. Kennedy and LaGuardia airports, described as “the centerpieces of New York's resurgence”, the state’s leaders added.
    George Russell
    Trump takes executive action on economic relief
    Demetri Sevastopulo in Washington
    US president Donald Trump signed four executive orders at the weekend, all aimed, he said, at helping Americans cope with the economic fallout from the pandemic after talks with Democrats over a Congressional rescue package collapsed.
    The US president signed one order that would partly renew unemployment benefits included in a previous stimulus package which expired last month and another that would suspend the payroll tax — something he had wanted to do long before the recent talks with Congress.
    Mr Trump had threatened to take action after Treasury secretary Steven Mnuchin and White House chief of staff Mark Meadows failed to reach agreement with Nancy Pelosi, the Democratic House speaker, and Chuck Schumer, the top Senate Democrat.
    Read more here
    George Russell
    Youth sanguine over post-virus economy, survey finds
    While the global coronavirus pandemic is hitting wallets worldwide, as businesses crash and companies institute layoffs and furloughs, young people are less worried about the long-term impact, a survey has found.
    Standard Chartered, the bank, said a recent poll revealed that one-third of respondents said Covid-19 had forced them to earn less, while more than half expected the pandemic to further affect their income or employment.
    But respondents aged between 18 and 34 expressed the most confidence they would bounce back from the economic hardship caused by the pandemic.
    StanChart found that 80 per cent of those aged 18-34 believed they had the digital skills needed to thrive post-pandemic, compared with 63 per cent of those over 65.
    About 45 per cent of respondents expected their income to increase over the next three to six months, with 15 per cent expecting income gains of 25 per cent or more.
    The bank surveyed 12,000 adults in China (including Hong Kong), India, Indonesia, Kenya, Malaysia, Pakistan, Singapore, Taiwan, United Arab Emirates, UK and US.
    George Russell

    Global deforestation accelerates during pandemic
    Anna Gross in London, Andres Schipani in Manaus, Stefania Palma in Singapore and Stephanie Findlay in New Delhi
    Forests have been razed at an alarming rate across Asia, Africa and South America during the coronavirus pandemic, according to new research, as environmental law enforcement has been sidelined and villagers in the tropics have turned to logging for income.
    Since the start of the coronavirus pandemic, forest loss alerts have increased by 77 per cent compared to the average from 2017-2019, according to data from Global Land Analysis and Discovery — a worldwide warning system for the depletion of tree cover — and compiled by conservation body WWF Germany.
    The alerts are based on satellite detection of tree cover loss. While they cannot definitively be attributed to deforestation or logging, they are the best global indicator of land change over time.
    Read more here
    George Russell
    One in three child patients requires intensive care: CDC
    While children are much less likely than adults to end up in hospital with coronavirus, those that do are just as likely to need intensive care, data collated by the US Centers for Disease Control and Prevention indicate.
    While the hospital admission rate for people under 18 is just 8 per 100,000 – compared with 164.5 per 100,000 for adults – children require intensive care at the same rate as adults: about one in three.
    “Children are at risk for severe Covid-19,” the latest CDC Morbidity and Mortality Weekly Report noted. “Public health authorities and clinicians should continue to track paediatric [Covid-19] infections,” it added. “Reinforcement of prevention efforts is essential in congregate settings that serve children, including childcare centres and schools.”
    A team led by CDC epidemiologist Lindsay Kim analysed data from hospitals in 14 US states between March 21 and July 25. The researchers said the proportion of children needing hospital care had risen during the period from 0.1 to 0.4 per 100,000, with a weekly high of 0.7 per 100,000.
    The report acknowledged that most reported infections in children aged under 18 years are asymptomatic or mild, but added: “Less is known about severe Covid-19 in children requiring hospitalisation.”
    George Russell
    Weekend news you might have missed …
    The US unemployment rate fell to 10.2 per cent in July from 11.1 per cent in June, while employers added fewer jobs than June as the economic rebound from the pandemic was hindered by a jump in Covid-19 cases in the American south and west. The US labour department said employers added 1.8m jobs in July, a much slower pace from 4.8m in June.
    New York schools will be allowed to reopen when the academic year begins in September, as the state that served as the pandemic’s early hotspot in the US declared a turning point in its fight against the coronavirus. Andrew Cuomo, the state’s governor, said on Friday that all New York school districts aiming to reopen would need to set out specific plans for doing so.
    Britain will “not hesitate” to add other countries to its quarantine list, chancellor of the exchequer Rishi Sunak said on Friday, as fears grow that rising numbers of Covid-19 cases across Europe could disrupt the summer plans of UK holidaymakers. Last week, Belgium, Andorra and the Bahamas were added to the list of countries subject to 14-day quarantine requirements and the spotlight is now on France.

    More than 1m employees and freelancers working for festivals, concerts and other events such as Glastonbury, pictured, will lose their livelihoods and put the future of live events in the UK at risk if the government doesn’t provide financial support, according to estimates by Plasa, an events business group. “We will lose a skillset that has taken years to build up,” said Peter Heath, Plasa chief executive.
    The UK government on Friday tightened local lockdowns in England by adding Preston to areas where different households cannot meet indoors. The number of new virus cases in Preston, a city of 140,000 people in Lancashire, north-west England, rose to 32.8 per 100,000 people in the week to August 3, up from 20.3 in the previous seven days.
    Tens of thousands of Bolivians blocked roads across the country over a decision to delay the presidential election due to coronavirus, prompting fears of a repeat of the chaos and bloodshed that followed the last election nine months ago. The Organization of American States accused protesters of “preventing the passage of oxygen tankers and ambulances necessary to attend the pandemic”.
    George Russell
    Hong Kong landlord doubles tenant relief scheme
    Hong Kong landlord Link Asset Management said on Sunday it would double the size of its tenant support scheme to HK$600m (US$77m), as a second wave of coronavirus infections grips the Chinese territory.
    The company said it would waive management and air conditioning charges for all tenants in August and September, totalling more than HK$150m, and waive all rents on its 128 non-government and welfare organisation tenants in those months.
    "Hong Kong is seeing the worst pandemic in decades," said chairman Nicholas Allen. Link has about HK$200bn in assets. The company recorded a 5.6 per cent rise in revenues to HK$10.7bn in the year to March 2020 on income of HK$44.2bn.
    Link said some tenants' rents had been reduced, while others were being paid in instalments with interest waived on late payments and a moratorium applied to service charges.
    George Russell
    Corporate news you might have missed ...
    Warren Buffett’s Berkshire Hathaway reported a surge in profits in the second quarter as the value of its stock portfolio rebounded, offsetting a near $10bn writedown and a slide in operating earnings. Berkshire said it would take a $9.8bn writedown on Precision Castparts, the aerospace parts supplier, reflecting the deep contraction in air travel since the onset of the coronavirus pandemic.
    Thousands of British Airways staff will find out in the next few days whether they have lost their jobs as the airline pushes ahead with its restructuring plan in a battle to survive the worst crisis in its history. From Friday, BA cabin crew, engineers and ground staff began receiving letters informing them of the outcome of plans to cut up to 12,000 jobs.
    Russian discount grocery chain Magnit says a coronavirus-related boost to revenues has accelerated its turnround and helped te company resume its challenge to market leader X5. Profit so far this year is nearly triple that of 2019, said chief executive Jan Dunning, while total revenue is up 14 per cent year on year to Rbs763bn ($10.4bn).

    About a third of jobs at London's Evening Standard are to be eliminated in the most far-reaching cost cuts at any large UK publisher since the pandemic. Staff at the free newspaper were told on Friday of proposals to cut 115 jobs to help save the company, which is owned by Evgeny Lebedev, the Russian-born newspaper proprietor nominated for a peerage last week.
    The AA, the British roadside recovery group whose ads once said it “gets someone out of trouble every eight seconds”, is in talks about a rescue of its own. As the coronavirus pandemic has hit earnings, and repayment deadlines edge into view, the company is finally attempting to bring its more than £2.6bn of debt under control.
    Realme, a low-cost newcomer Chinese smartphone maker, has carved out a leading position in Asia’s emerging markets, as the pandemic intensifies competition to secure market share in the strategically important region. In the first quarter of 2020, Realme’s sales grew 157 per cent year on year, making it one of only two brands to register positive growth globally during the period.
    George Russell
    US small business more confident on hiring: poll
    Just over half of US small businesses are hiring, or attempting to hire, employees, signalling the emergence of confidence that the coronavirus pandemic has reached its worst, a survey indicates.
    According to a monthly poll of its members by the National Federation of Independent Business, a small-business lobby group, 51 per cent of smaller entities were adding or trying to add to headcounts in July.
    But 86 percent of those hiring or trying to hire reported few or no qualified applicants for the positions they were trying to fill, up one point.
    “This summer has been a challenging time for small businesses, and we see the evidence of that in the July jobs report,” said NFIB chief economist Bill Dunkelberg.
    “Owners are doing everything they can to get their employees back to work but there have been obstacles, including unemployment insurance and government reopening regulations, that are causing further obstacles to small businesses,” he said.
    George Russell
    Post-Covid-19 project to connect Christchurch by bike
    The New Zealand city of Christchurch is to get six major bicycle routes — some as long as 15km — as part of a Covid-19 economic recovery programme and as lockdowns drove more residents to use bike-riding to socially distance, the government announced at the weekend.
    “During lockdown we saw many more families and kids out on their bikes, which shows that when our streets feel safe to cycle people want to ride," said associate transport minister Julie Anne Genter.
    “Construction is expected to start within the next few months, with the remainder beginning in 2021,” she added.
    The Christchurch projects, valued at NZ$125m (US$83m), account for more than half the NZ$225m earmarked for the national cycleway network.
    The cycleways are part of a NZ$3bn infrastructure fund designed to offset economic damage from the pandemic.
    On Sunday, New Zealand passed a milestone of 100 days without a local Covid-19 infection from an unknown source.
    George Russell
    Global threats are reordering supply chains: McKinsey
    Andrew Edgecliffe-Johnson in London
    Companies could shift a quarter of their global product sourcing to new countries in the next five years, according to a new study that warns of rising threats to supply chains such as the coronavirus pandemic.
    Goods worth $2.9tn-$4.6tn, or 16-26 per cent of global exports in 2018, are in play, the McKinsey Global Institute estimates in the report.
    Cost considerations and government pressures to become more self-reliant could see more than half of pharmaceutical and apparel production move to new countries, it adds.
    Read more here
    George Russell

    Pandemic seals dominance of UK’s biggest banks
    Nicholas Megaw in London
    The first Metro Bank branch opened 10 years ago with the aim of making UK banking more like the US. A decade on, the coronavirus pandemic has highlighted the gulf that still remains between the two.
    Metro may have succeeded in introducing an American-style emphasis on customer service. But investors — and regulators — had also hoped to replicate the competitive lending market that helped the US economy recover when the biggest banks were reluctant to offer loans after the 2008 financial crisis.
    Instead, experts fear the latest economic downturn will further entrench the dominance of Britain’s biggest banks — Barclays, HSBC, NatWest and Lloyds.
    Read more here

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    The Dollar Exchange Rate Report ( Morning Edition): The US Dollar Floated Near 3 Months Highs as Bonds Start Selling and Risk Currencies Pare Gains. Dollar hovers near three-month high as bonds sell off and risk currencies pare gains Reuters ...