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The UK is on course to overtake Germany and the USA in annual GDP growth in 2023

   News / 25 Oct 2021

Published: 25 October 2021
Location: London, UK

By Suzanne Evans, Director, Political Insight


The UK is on course to overtake Germany and the USA in annual GDP growth in 2023, according to the latest projections from Statista, which forecasts British GDP to grow by 1.65 percent. The US is forecast for 1.39 percent growth for the same period, followed by Germany on 1.21 percent. Statista predicts the UK will fall behind the collective Western European nations, on 1.74 percent, but will remain ahead as a standalone economy.
 
Northern Ireland Protocol: the UK Government and the EU are set for a collision course as intense negotiations start again in London this week, the Express reports. Although the EU has conceded that checks on some products will not have to take place between Northern Ireland and mainland Britain, it is still demanding disputes are resolved by its court, the European Court of Justice (ECJ) rather than a neutral body. A UK Government source said: “Our position remains unchanged: the role of the ECJ in resolving disputes between the UK and EU must end.”
 
Wednesday’s Autumn Spending Review and Budget Preview:

  • Chancellor of the Exchequer Rishi Sunak is expected to announce planned increases to the National Living Wage to come in around £9.42 per hour, up from its current level of £8.91. 
  • England's city regions are set to receive billions of pounds to improve public transport in the budget. Sunak will commit £6.9bn towards train, tram, bus and cycle projects when he sets out his spending plans. Greater Manchester (£1.05bn), the West Midlands (£1.05bn) and West Yorkshire (£830m) are among the regions that will benefit, alongside the Liverpool City region (£710m), South Yorkshire (£570m, the West of England (£540m), and the Tees Valley (£310m).
  • An investment of almost £2bn into building new homes on derelict or unused land in England is expected to be announced. The aim is to build 160,000 greener homes on brownfield land the size of 2,000 football pitches and put £9m towards the creation of 100 urban "pocket parks" across the UK, according to various media reports.
  • Greenpeace and EY are urging Chancellor Rishi Sunak to raise taxes on Wednesday, to tackle climate and nature emergencies. Yahoo Finance UK says they want him to bring in levies on green energy, but also to scrap VAT on green goods such as insulation, solar panels and electric cars, and on services like retrofitting homes to make them low carbon. The UK currently stands in sixth place out of the G7 nations for investment in climate infrastructure, lagging behind its peers in green jobs and investment plans, according to a report by the Trades Union Congress. Greenpeace said the upcoming budget is “an opportunity to get the UK back on track with a green stimulus”, as well as gaining credibility ahead of the COP26 climate conference taking place in Glasgow next month. In a budget survey conducted by EY, attracting investment into the UK was listed as a top priority by two-thirds of respondents, with particular focus on those incentives that will fast track the UK’s transition to a greener economy. Of 1,000-plus businesses surveyed by EY, there was a strong recognition of the need to raise revenue, the firm said, with over half the respondents (56%) thinking that the finance minister should be acting now or next year on raising taxes.

The government has blocked a new law to curb businesses' ability to lay staff off and take them back on different - often worse - pay and terms. The practice - known as "fire-and-rehire" - has caused several industrial disputes. Labour MP Barry Gardiner said the government was "cowardly" for using “Parliamentary tactics” to stop his bill in its tracks, but No 10 said it wanted new guidance for companies, rather than a law. A spokesman for Prime Minister Boris Johnson said: "Using threats of firing and rehiring is completely unacceptable as a negotiating tactic. We expect companies to treat their employees fairly. "However, there is insufficient evidence to show legislation will stop the practice or will be effective."
 
36 retailers, manufacturers and investors including Tesco, John Lewis, Primark, Asos and Unilever have called on the government to introduce a legal requirement for companies to carry out human rights and environmental checks on their global supply chains. In a letter to ministers, the firms said the Covid-19 crisis demonstrated the "fragility of global supply chains, and the vulnerabilities this creates and exacerbates for workers, communities, indigenous peoples and businesses around the world", and warned there was "a real risk that recent progress will be reversed". Other signatories include Cadbury owner Mondelez, Mars, Twinings and Microsoft and the investors Aviva, Jupiter and the Local Authority Pension Fund Forum. European countries are adopting new HREDD (Human Rights Environmental Due Diligence) laws, such as the corporate duty of vigilance law in France and legislation under development elsewhere on the continent, and the EU is set to table a new initiative later this year that will apply to all UK firms operating in the single market.
 
A total of 116 Members of Parliament who drive into London have avoided paying £70,000 worth of congestion charges and ultra-low emission zone(ULEZ) fees in the last year alone, the Express reports. Vehicles who do not meet the ULEZ emissions standards must pay a daily charge, which is between £12.50 and £27.50 while the congestion charge cost is £15. Clear air groups have now written to Parliament's expense watchdog to ask for this to stop. The chair of London's health committee commented this "defeats the point of having these deterring measures in place”. ULEZ charges are set to affect more people from today, October 25, as the zone expands up to, but not including, the North Circular Road (A406) and South Circular Road (A205) in London. The ULEZ operates 24 hours a day, seven days a week, every day of the year except Christmas Day.  

Major phone networks have agreed to automatically block almost all internet calls coming from abroad if they pretend to be from UK numbers, Ofcom has confirmed. Criminals have been using internet-based calling technology to make it look like a phone call or text is coming from a real telephone number. Almost 45 million consumers were targeted by phone scams this summer. So far, one operator has already implemented the new plans, the regulator told the BBC, while other phone networks are still exploring methods of making it work.
 
Spain's Sabadell bank said on Saturday its board has rejected an offer from Co-operative Bank for its British TSB subsidiary.  Sabadell confirmed in a statement it had received a letter from the Co-op bank outlining a proposed offer but said "this is not a transaction that we wish to explore at this moment as we have previously expressed publicly". Sky News said Co-operative Bank had indicated  it would be willing to pay more than £1 billion to acquire control of TSB. A spokesperson for Co-operative Bank declined to comment on Sabadell's statement or media reports.
 
Elon Musk’s Satellite company, Starlink is eyeing a tie-up with Vodafone to expand its satellite broadband service in the UK. Part of Musk’s SpaceXproject, Starlink launched a UK trial in January this year, which has expanded to a few thousand people who use a satellite dish to receive internet from hundreds of satellites orbiting at around 340 miles high. According to the Telegraph, industry insiders say Starlink has been hunting for ground station infrastructure, which provides a link to the backbone of the UK’s fibre network, and high frequency spectrum, which is held in the UK by four providers including Vodafone. Starlink is also thought to be working on ground infrastructure with Arqiva, and at a site on the Isle of Man. A Vodafone spokesperson said: “Regarding satellite spectrum, we can confirm we are in talks with multiple operators. We're close to striking a deal.” Starlink did not respond to a request for comment.
 
Britain's top sportswear retailer JD Sports said on Friday it has acquired 80% of Cosmos Sport, which is based in Crete, Greece, as it looks to boost its European footprint.
 
Hydrogen specialist ITM Power is set to build the world's largest electrosyser production facility in Sheffield as part of a £250 million expansion programme. The British manufacturer's second factory in the city is expected to create 300 jobs.
 
Shares in fintech company Wise fell as much as 5% on Friday after its Estonian co-founder Taavet Hinrikus sold 10m of his shares – amounting to a £81.5m stake in the firm - to fund his growing pool of startup investments. Hinrikus’ private investment firm retains 54 million shares in Wise. The company, known formerly as TransferWise, specialises in cross-border transfers and is one of Britain's most well-known fintech unicorns – a company worth more than $1bn (£730m).
 
A survey of small and medium sized enterprises (SMEs) by Lloyds Bankshows only 11% of businesses are concerned about their level of debt, despite a big increase in the amount of borrowing since the start of the pandemic. Their main worry seems to be barriers to future growth, Yahoo Finance UK reports. Of those who are worried about debt, 54% said that while the repayments are affordable, servicing the debt will prevent the business from investing in itself to grow for the future. Only 16% said the main issue was the ability to make repayments. The main barrier to growth over the next five years is a lack of profit (29%), followed by high running costs (25%). About a quarter (24%) are concerned about regulation and legislation impacting their prospects, while 15% have concerns about problems managing cash flow. “As the economy has reopened and begins to recover, it is reassuring that a relatively low proportion of small businesses are worried about their ability to make repayments on their debts,” Gareth Oakley, managing director of business banking at Lloyds Bank.
 
US taxi-hailing firm Lyft has revealed that 4,158 incidents of sexual assault – including 360 of rape - were reported to the firm between 2017 and 2019, Reuters reports. In its first-ever safety report, Lyft also detailed 105 motor vehicle fatalities and 10 deaths involving physical assaults. Lyft, alongside its larger US rival Uber, had pledged in 2018 to release data on serious safety incidents and abuse. The following year, Uber disclosed 5,981 reports of sexual assault involving passengers and drivers between 2017 and 2018. Both companies are facing a number of US lawsuits from passengers over alleged sexual assault with the first trial scheduled to take place in 2022. Lyft said "over 99% of trips occurred without any reported safety incident".
 
China Evergrande Group said on Sunday it had resumed work on more than 10 projects in six cities after averting default with a last-minute bond payment last week. The property giant, deep in crisis with more than $300 billion in liabilities, has not disclosed how many of its 1,300 real estate projects across China it has had to halt work on, Reuters says. China's second-largest property developer also promised potential buyers it will complete building of their homes and said that work on one of the world's biggest soccer stadiums, in the southern city of Guangzhou, was proceeding as planned. Last week's move to pay $83.5 million in interest on a U.S. dollar bond has bought Evergrande another week to wrestle with a debt crisis looming over the world's second-biggest economy. Evergrande's woes have reverberated across the $5 trillion Chinese property sector, which accounts for a quarter of the economy by some metrics, with a string of default announcements, rating downgrades and slumping corporate bonds. Its debt crisis is also being widely watched by global financial markets concerned about broader contagion.
 
HSBC Holdings meanwhile reported a surprise 74% rise in third quarter profit as it shrugged off concerns about pandemic-related bad loans and property problems in its key market of China, allowing it to announce a share buyback of $2 billion. CFO Ewen Stevenson told Reuters on Monday that the buyback should be seen as “a measure of the confidence that we have at the moment that we are not unduly concerned about our exposures in China".
 
The Australian government and telecoms giant Telstra are buying a Pacific telecoms company in a joint venture, a move seen as a political block on China's influence in the region. Telstra called the A$2.1bn (£1.2bn) deal to buy Digicel Pacific a "unique and very attractive commercial opportunity to boost our presence in the region". The firm employs 1,700 people across Papua New Guinea, Fiji, Samoa, Vanuatu and Tahiti and last year denied it was in talks to sell its Pacific arm to state-owned China Mobile. According to Telstra, the Australian government approached it "to provide technical advice in relation to Digicel Pacific" which is "critical to telecommunications in the region". The government then agreed to finance the bulk of the bid, Telstra said. "Digicel is the primary player in the Pacific and Australia sees it as a strategic asset that they can't allow to fall into the hands of China," said Jonathan Pryke of the Lowy Institute, a Sydney-based think tank.
 
Reuters reports that Nigeria is to launch a digital currency, the eNaira, today. A few months’ ago, the country’s central bank, the Central Bank of Nigeria(CBN) banned banks and financial institutions from dealing in or facilitating transactions in cryptocurrencies. Governor Godwin Emefiele has said the eNaira would operate as a wallet against which customers can hold existing funds in their bank account. "The eNaira therefore marks a major step forward in the evolution of money and the CBN is committed in ensuring that the eNaira, like the physical Naira, is accessible by everyone," the bank said in a statement. Nigeria has named Barbados-based Bitt Inc as a technical partner in developing the eNaira.


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