Slow and steady wins the race. This is what I tell myself when I’m dragging my fatigued body around the park until my phone tells me I’ve reached 5k and I can shuffle home for a nap. Or when I’m tackling a truly monumental roast dinner followed by a rhubarb crumble chaser and a dollop of ice cream.
And while my acts of “self-care” demand little to no pace, I suspect China’s leaders won’t be as easy on themselves when it comes to their economic progress. It was reported yesterday that China’s economic growth has dropped to its slowest annual rate since 1990 when the country was facing international sanctions in the aftermath of the Tiananmen Square massacre.
Thanks to a range of factors, including policy decisions in Beijing which have led to declining consumer sentiment and capital expenditure, growth for the full year was 6.6%, down from 6.8% in 2017. Gross domestic product fell to 6.4% in the fourth quarter – the lowest level since the financial crisis in 2008. And as the US trade war rumbles on, sentiment is sour and consumers are being cautious with their money.
But while economic progress may be slow and steady, China is still winning the race, with growth far exceeding that of the UK, US and Japan, and ahead of Beijing’s target of 6.5% annually. Last week, the Chinese government announced plans to inject $83 million into the economy to boost liquidity and encourage growth, which should “prevent a disorderly slowdown” according to Amy Yuan Zhuang, Nordea’s chief Asia analyst.
Still, progress has now continued to decline for three consecutive quarters, prompting concerns over the wider impact on the global economy.
The IMF warned yesterday that the global economy is weakening faster than expected ahead of the start of this year’s World Economic Forum in Davos. The fund revised its initial forecasts down as a result of weak data in Europe and Asia coupled with long-term uncertainty. Brexit was one of the key risks highlighted – in addition to the US-China trade war – and the IMF warned that a no-deal could have negative consequences across Europe.
So, while a sluggish pace might be perfect for a Sunday of feasting and attempting to run 5k, it isn’t such a great trend for the global economy – here’s hoping for a Brexit break-through or a trade war truce to reinvigorate international growth.
MPs have begun to put forward alternative Brexit proposals ahead of next week’s second meaningful vote on the issue. Theresa May has scrapped the proposed £65 for EU nationals who want to continue to live in Britain after Brexit and her focus is now on amending the deal’s Irish backstop component. But she’s facing internal pressure to rule out a no-deal Brexit: up to 40 members of the government will resign next week if they are banned from voting to stop a no-deal.
Meanwhile, Jeremy Corbyn has “opened the door” for MPs to vote on a second referendum, after coming under intense pressure from his party. Labour tabled an amendment yesterday calling on the government to hold a vote on two options: Labour’s own alternative Brexit plan and whether to legislate to hold a public vote on the final outcome of negotiations.
France has summoned Italy’s ambassador to its foreign ministry after deputy prime minister Luigi Di Maio accused the country of “continuing to colonise Africa” and called for the EU to implement sanctions. Relations between the two nations, which are usually close allies, have been deteriorating since the anti-establishment 5-Star-Movement and far-right Lega Nord won power in Italy last year.
Business & Economy
Scottish hoteliers are being urged to learn Mandarin and provide chopsticks in order to capitalise on the growing number of Chinese tourists visiting the Highlands. The destination is becoming increasingly popular among China’s middle-class, so much so that the Highland and Islands Enterprise development agency is organising China Ready workshops to help local businesses make the most of the trade. (£)
Tax officials have been left red-faced this morning after it emerged that they had wrongly charged taxpayers for failing to submit their self-assessment returns online – even though the deadline is almost two weeks away. Having previously denied the claim, officials apologised yesterday and have promised to cancel the penalty charges.
France has fined Google under the EU’s new privacy rules, accusing the tech giant of failing to be transparent about how it uses data and not having a legal basis for personalising ads. The €50 million fine will raise concerns among other tech companies facing similar GDPR complaints.
What happened yesterday?
The FTSE 100 ended slightly lower yesterday, down 6.74 points at 6,961.59. Winners included engineering specialists, with GKN-owner Melrose Industries up 1.9% and Spirax-Sarco Engineering finishing the day 1.6% higher. B&Q-owner Kingfisher was one of the top fallers, dropping four per cent, while Antofagasta Holdings was down 2.7%.
In the global markets, the announcement that China’s growth has slowed for three consecutive quarters was obscured slightly by optimism over progress in the US-China trade dispute. Overall upward momentum held in the fourth straight weekly gain for global stocks: the CSI 300 index listed in Shanghai and Shenzhen closed up 0.6%.
European stocks faltered: the region-wide Stoxx 600 was down 0.4%, with sectors sensitive to the economic outlook in China bearing the brunt of the losses.
On currency markets, the pound was up 0.16% against the dollar at $1.28 and up 0.12% against the euro at €1.13.
Accrol Group Holdings
IG Group Holdings
Close Brothers Group
European Investment Trust
Keystone Investment Trust
Mitchells & Butlers
Polo Resources ltd. (DI)
Standard Life Private Equity Trust
UK Economic Announcements
(09:30) Claimant Count Rate
(09:30) Public Sector Net Borrowing
Int. Economic Announcements
(10:00) ZEW Survey (EU) – Economic Sentiment
(10:00) ZEW Survey (GER) – Current Situation
(10:00) ZEW Survey (GER) – Economic Sentiment
(15:00) Business Inventories (US)
(15:00) Existing Home Sales (US)
Columns of Note
Writing in the Spectator, Brendan O’Neill notes that last week’s Question Time will send a shiver down the spine of Corbynites. The largely working-class audience unmistakably let out a loud cheer for a “no deal” Brexit – in stark contrast to the views of the Labour elite, and indeed the political class more generally. This illustrates one of the “most important divides in British politics today — that between the woke bourgeois agitators of Corbyn’s inner circle and the ordinary people” who want to leave the European Union, deal or no deal. (£)
In this week’s New Yorker, Joshua Rothman asks: why are our big decisions in life often less calculated than small, inconsequential ones? While we agonise over what to stream on Netflix, we action a break-up in a gush of emotion and a bottle of wine. Instead, we should use “decision science”: engage with decisions, seek diverse perspectives, challenge assumptions and make an explicit effort to map the variables. (£)
Did you know?
The earliest known socks were made to be worn with sandals.
House of Commons
Oral Questions: Foreign and Commonwealth Office (including Topical Questions)
Ten Minute Rule Motion: Green Deal (Conduct of Home Energy and Lifestyle Management Ltd) - Alan Brown
Consideration of Lords Amendments: Counter-Terrorism and Border Security Bill
House of Lords
Funding for children with special education needs - Lord Blunkett
New regulations on the use of drones – Baroness Randerson
Shortage of common medicines - Baroness Thornton
Orders and Regulations
Justification Decision Power (Amendment) (EU Exit) Regulations 2018 - Lord Henley
Transfrontier Shipment of Radioactive Waste and Spent Fuel (EU Exit) Regulations 2018 - Lord Henley
Nuclear Safeguards (EU Exit) Regulations 2018; Nuclear Safeguards (Fissionable Material and Relevant International Agreements) (EU Exit) Regulations 2018 - Lord Henley
Invasive Non-native Species (Amendment etc.) (EU Exit) Regulations 2019 - Lord Gardiner of Kimble
Floods and Water (Amendment etc.) (EU Exit) Regulations 2019 - Lord Gardiner of Kimble
Topical Questions (if selected)
Scottish Government Debate: City Deal and Regional Economic Partnership
House of Commons
Oral Questions: Wales
Prime Minister’s Question Time
Ten Minute Rule Motion: Ancient Woodland Inventory (England) – Michael Fabricant
Consideration of Lords amendments: Tenant Fees Bill
Motion: Private Members’ Bills
Adjournment: Fire safety and cladding – Mr Steve Reed
House of Lords
Preventing shop workers being attacked – Baroness Kennedy of Cradley
Risks from Chinese ownership of technologies and platforms critical to UK domestic infrastructure – Baroness Anelay of St Johns
Improving rail service reliability – Lord Teverson
Legislation: Trade Bill – Committee stage (day two) – Baroness fAIRHEAD
Debate: How immigration policy post-Brexit will take account of the recruitment of EU and other foreign nationals to jobs in teaching modern foreign languages and public service interpreting – Baroness Coussins
Transport, Infrastructure and Connectivity
Justice and the Law Officers
Ministerial Statement: Review of Personal and Social Education
Ministerial Statement: Clinical Waste Services
Scottish Government Debate: Supporting Entrepreneurship