The Scottish government may often find itself at political odds with its UK counterpart. But the SNP-Conservative relationship looks positively rosy when contrasted with the rising tensions between the Spanish government and the regional government in Catalonia.
The unilateral decision by the Catalan government to hold an independence referendum – which the Spanish government and constitutional court have described as illegal under the 1978 Spanish constitution – has sparked one of the the worst political crises since Spain returned to democracy 40 years ago.
Prime Minister Mariano Rajoy went on national television yesterday to urge the Catalan government to give up its “escalation of radicalism and disobedience”.
Carles Puigdemont, Catalonia’s president, hit back in the escalating war of words by accusing Madrid of suspending the region’s autonomy.
This came as Guardia Civil officers raided regional government offices, arrested 14 senior officials and seized referendum materials. Spain’s finance ministry has also implemented measures, limiting new credit that the regional government can access and requiring central supervision for payment of non-essential services.
Catalonia held an unofficial referendum in November in 2014 in which just two million out of 5.4 million eligible voters took part. However, this time appears to be different as the separatist Catalan government has vowed to declare independence within 48 hours should the vote go their way.
Around 70% of Catalans are thought to favour the staging of an independence referendum but most polls suggest that they are evenly split on the issue of independence itself.
With such a heavy handed approach, does Madrid risk alienating the undecided voters that it needs on side?
Theresa May has threatened to cut £30 million from the UK's £90 million annual United Nations commitment if the organisation does not become “more agile, transparent and joined up”. In a 15-minute address to the General Assembly, the prime minister urged the UN to reform. She also criticised Russia, issued a thinly veiled rebuke to President Trump for his decision to withdraw from the Paris Agreement, and called on the Syrian government to come to the negotiating table.
Rescue operations to rescue trapped survivors are ongoing in Mexicofollowing Tuesday’s earthquake. The death toll from the 7.1 magnitude tremor now stands at 237, including 21 school children and four adults at Enrique Rebsamen primary and secondary school. Miguel Ángel Mancera, the mayor of Mexico City, said that 52 people had been pulled alive from rubble and emergency services are continuing to sift through the debris.
Puerto Rico is also battling natural disaster after Hurricane Maria – the biggest storm to hit the US territory in a century - killed one and left 3.5 million of its residents without power. According to the US National Hurricane Center, the island has been affected by “catastrophic” flooding. The storm is now moving towards the Dominican Republic.
BUSINESS AND ECONOMY
The US Federal Reserve confirmed yesterday that it would begin reversing its quantitive easing programme which has been in place for nine years. Speaking after a meeting of the Fed’s policymaking committee last night, Janet Yellen, the bank’s chairwoman, said that QE was “not intended as an active tool for monetary policy in normal times” and that the Fed would reduce its balance sheet “in a gradual and predictable manner”.
Ryanair is continuing to battle criticism after cancelling more than 2,000 flights after a blunder relating to its pilot rota system. The airline urged passengers to “bear with us” as it faced complaints regarding rescheduled flights and the processing of compensation requests. This follows news that a group of Ryanair pilots has rejected a cash bonus to work extra days and are requesting new contracts and better working conditions instead.
Google is to buy part of the smartphone business of Taiwanese electronics firm HTC for approximately $1 billion. The deal will not involve the purchase of a direct stake and HTC will continue to run its remaining smartphone operation, however, some HTC staff will move over to Google. The deal is expected to close in early 2018 pending approval from regulators.
What happened yesterday?
European stocks, particularly those in the banking sector, were steady in early trading as investors waited to hear whether the US Federal Reserve would increase interest rates. Ultimately the Fed left rates unchanged but signaled that it does anticipate one more increase by the end of the year.
The FTSE 100 ended the day down 3.30 points at 7,272.95. Babcock International Group was the biggest gainer on the index, climbing 5.81% after a trading statement in which it announced new contracts and that revenue visibility has continued to improve. Kingfisher was another strong performer, closing up 5.60% on the back of news that its five-year transformation plan is on track.
Diageo was the day’s biggest faller as its shares dropped 2.78%. In a trading statement, the company said that trading was in line with expectations but predicted that the expected ban on alcohol sales near highways in India and the later timing of Chinese New Year would impact sales. Investors were also reported to be spooked by the jump in sterling.
On the currency markets, the pound was down 0.04% against the dollar at $1.3487 and up 0.05% against the euro at 1.1349 euros.
Cambridge Cognition Holdings, Elektron Technology, Quixant, Safestyle UK, Scisys, Mission Marketing Group, Venture Life Group
Auto Trader Group, Begbies Traynor Group, First Property Group, Gloo Networks, IG Group Holdings, NCC Group, Park Group, Ryanair Holdings, Cambium Global Timberland Ltd., VietNam Holding Ltd., WYG
UK Economic Announcements
(09:30) BBA Mortgage Lending Figures
(09:30) Public Sector Net Borrowing
International Economic Announcements
(13:30) Continuing Claims (US)
(13:30) Initial Jobless Claims (US)
(13:30) Philadelphia Fed Index (US)
(14:00) House Price Index (US)
COLUMNS OF NOTE
In the Financial Times’ Big Read, Jim Pickard examines the various reasons driving Labour’s ambiguous position towards Brexit.
Theresa May’s former chief of staff, Nick Timothy, uses his column in The Telegraph to outline what he believes the prime minister should tell the EU in her Florence speech.
DID YOU KNOW?
The most remote cash machine in the world is located at McMurdo Station, Antarctica. Installed in 1998 by Wells Fargo to supply the scientific community which lives and works there, the machine dispenses US dollars and is serviced every two years. McMurdo Station staff are trained to make simple repairs between services and there is a second, non-functioning cash machine which can be cannibalised for parts.
House of Commons
In recess until 9th October for party conference season
House of Lords
In recess until 9th October for party conference season
First Minister’s Questions
Stage 3 Proceedings: Contract (Third Party Rights) (Scotland) Bill
No business scheduled