Macron rebuffs publish-Brexit City deal unless of course United kingdom pays into EU budget

French president rejects ‘differentiated financial services access’, states ‘choice can be UK’

French president Emmanuel Macron has rejected the thought of a tailored Brexit deal for that City, insisting Britain won’t be permitted full use of Eu markets, including financial services, unless of course its smart in to the EU budget and accepts its rules.

Macron delivered the challenging message in the finish of the joint press conference with Theresa May at Sandhurst military training college on Thursday. Each day-lengthy United kingdom-EU summit occured to underline the close relationship backward and forward countries after earlier news of the £45m British boost to border peace of mind in Calais.

Financial services is among the sectors by which France wishes to seize an elevated share from the EU market after Brexit. City firms are worried about new trade barriers, including losing so-known as “passporting” legal rights, that permit them to operate through the EU from headquarters working in london.

Quick guide

All that you should learn about Anglo-French trade

Which country is ‘on top’?

Roughly £71bn of products or services were traded backward and forward countries in 2016. France has got the upper hands: the United kingdom exported £33.8bn to France but imported £37.6bn. Exports to France have fallen by about 9% during the last decade, while imports are roughly flat. France is Britain’s third-largest export market.

What will get traded?

There’s an affection on sides from the Funnel for which each country does well: Britain may be the largest importer of champagne, while greater than 28m Harry Potter books go another way. France may be the second greatest European food exporter towards the United kingdom and makes up about 20% of dairy imports. There have been greater than 500 French restaurants in great britan in 2017, 54 of these within the Michelin Guide. Signs United kingdom exports are cars, chemicals and financial services. France is a huge exporter of aircraft, machinery and cars.

Living and dealing

About 150,000 British citizens reside in France, while 155,000 French nationals are moved in the United kingdom. Banking is easily the most everyday sort of employment for French individuals Britain, with most them residing in London and also the south-east you will find 15 accredited French schools within the United kingdom, 13 which have been in London. Roughly one fourth of British citizens in France reside in the Nouvelle-Aquitaine region in western France.


In France They make about 4m visits annually towards the United kingdom, which makes them the main nationality of foreign visitors. About 11 million vacationers visit France each year in the United kingdom, greater than from the other country.

Business links

Greater than 1,000 subsidiaries of British companies were located in France in 2014, generating 195,000 jobs. French companies with major operations in great britan range from the energy giant EDF and also the utilities firm Veolia.

Angela Monaghan

Photograph: Andy Rain/Environmental protection agency

Requested whether France would aim to “punish” Britain, by insisting financial services shouldn’t be incorporated inside a United kingdom-EU trade deal after Brexit, Macron stated, “I’m not here to punish or reward”.

“The choice can be Britain: it isn’t my choice – however they might have no differentiated use of financial services,” he stated. “If you would like access for financial services, be my guest – however it means you need to lead towards the budget, and accept European jurisdiction. It’s a scenario that are available for Norway”.

The choice would be a Canada-style trade deal, he stated, that could include financial services, but wouldn’t include access “on exactly the same level” as existing EU people.

The city has consistently stressed that Britain won’t be permitted to “cherry-pick” sectors, but Brexit secretary David Davis has stated he’s seeking a “Canada plus plus plus” arrangement, in line with the EU-Canada trade agreement, however with additional access for services.

Britain hopes by using the very first stage of talks taken care of, it can capitalise on close buying and selling relationships with key EU allies to attain a bespoke deal – but Macron stated France would keep to the agreed script.

Emmanuel Macron listens to Theresa May speaking at the Victoria and Albert museum in London on Wednesday. Emmanuel Macron learns Theresa May speaking in the Victoria and Albert museum working in london on Wednesday. Photograph: Adrian Dennis/AFP/Getty Images

Protecting the integrity from the single market resulted in if Britain chooses a Canada-style deal, it can’t be provided exactly the same accessibility single market that membership enables, in france they president added. “There should not be a hypocrisy in this way, or it wouldn’t work and we’d destroy the only market.”

The pm noticed that she’d stated in her own Lancaster House speech that Britain could leave the only market after Brexit but she wished to attain a “deep and special partnership” using the EU27.

May stated: “I don’t want to exclude any sector within the trade agreement in the future … But it doesn’t imply that the can get on allows is going to be equal to [being] part of the only market.”

Around the issue based in london, May stated it might continue being “a major global financial center,” insisting that might be to the advantage of the United kingdom, Europe and also the global economic climate.

Brexit wasn’t formally around the agenda in the summit, where ministers including foreign secretary Boris Manley and culture secretary Matt Hancock met their French counterparts to signal the breadth of cooperation backward and forward countries on issues from artificial intelligence to weapons construction.

Requested how he felt by what he known as “the Brexit” and whether he wished it might be reversed, Macron stated: “I greatly respect the option of the British people despite the fact that I be sorry.Inches

Calais, that the French president stated is needed to hurry up processing occasions for migrants, to 1 month for adults, and 25 days for unaccompanied children.

Macron stressed that the new “Sandhurst Treaty” signed in the summit will sit plus the existing Le Touquet agreement, and assist in improving the problem for migrants in Calais, that they visited the 2009 week. He stated migrants should be treated, “more humanely as well as in a far more efficient manner”.

The pm, requested whether she was getting little to acquire the pledge more cash, stated it might improve Britain’s border security. “It is within our interests,” she was adamant.

Both leaders frequently underlined the close relationship between your United kingdom and France, because they confirmed the Bayeux Tapestry can come to Britain on loan, in 2022.

“I am honoured in the loan of these a precious bit of our shared history which all over again underscores the closeness in our relationship,” May stated.

Macron stated with the plethora of bilateral contracts, across culture, security, art and trade, the brand new countries were, “making a brand new tapestry together”.

Earlier, the pm located a little working lunch with Macron in a gastropub, the Royal Oak, in her own constituency, before they travelled to Sandhurst to become welcomed having a military band as well as an RAF flypast.

The Secretary of state for Defence and also the French defence ministry issued some pot communique aiming a number of steps the 2 countries will require.

They’ll establish “a United kingdom-France defence ministerial council”, to do something like a “permanent and regular forum”, for that French and British defence secretaries to switch ideas and bear out joint planning.

The announcement came alongside confirmation the United kingdom will be sending three Chinook transport helicopters to assist France’s anti-terrorist operation in Mali.

Manley also tweeted the two countries had made the decision to determine some pot “panel of experts” to look at future projects – adding that possibly the Funnel Tunnel ought to be “just the very first step”.

Boris Manley (@BorisJohnson)

A lot important operate in #UKFRSummit outcomes, but I’m especially pleased we’re creating a panel of experts to check out major projects together. Our economic success depends upon good infrastructure and good connections. If the Funnel Tunnel be only a initial step?

The month of january 18, 2018

Brexit negotiations, despite reports that Britain hopes the £45m in funds it’ll offer peace of mind in Calais and also the area may help to win support from France for any generous trade deal.

Inside a major speech in September, Macron known as for any “profound transformation” from the EU after Brexit, which may visit a core of nations bind themselves together more carefully, with common defence, asylum and tax policies.

Also, he recommended other nations might choose less integration, within an EU where the United kingdom could “one day find its place again”.

Coca-Cola to market smaller sized bottles at greater prices as a result of sugar tax

Coca-Cola is by using smaller sized bottles then sell at greater prices instead of alter its famous sugar-laden secret recipe, while Irn-Bru faces an increasing consumer backlash over fears a brand new lower sugar version will ruin Scotland’s national soda.

The alterations are members of the formulations going ahead within the fizzy drinks business for that sugar tax. The price of some “price marked packs” of Coca-Cola offered in newsagents and supermarkets increases by greater than 10% in March, right before the brand new tax makes effect later.

The plans will discover a 1.75 litre bottle of Coke shrink to at least one.5 litres and simultaneously rise in cost by 20p to £1.99. The cost of the 500ml bottle can also be growing, from £1.09 to £1.25. The brand new cost means the price of one half-litre bottle may have soared 25% within several weeks, because they were just £1 until last fall.

“We don’t have any intends to alter the recipe of Coca-Cola Classic for it to be influenced by the government’s sodas tax,” stated a spokesman for Coca-Cola European Partners, the bottler for Coca-Cola products in the european union. “People love the flavour … and also have told us to not change.”

AG Barr, the manufacturers of Irn-Bru, took the alternative decision and then week will begin bottling a brand new form of that coffee which outsells Coke and Pepsi in Scotland and famously claimed to become “made in Scotland from girders”.

Coca-cola bottle sizes

The recipe contains half just as much sugar because of the introduction of low-calorie sweeteners, including aspartame. But loyalists aren’t happy. Irn-Bru fans are considered to be stockpiling that coffee, which goes back 117 many many use like a hangover cure. Simultaneously a “Hands off our Irn Bru” petition, began by Ryan Allen, a 27-year-old joiner from Ayr, has taken in near to 27,000 signatures per week.

“I don’t want Irn Bru as you may know it to finish,” Allen told the Protector. “I don’t think individuals who don’t drink Irn Bru or aren’t from Scotland know how we’re feeling about this. It’s a nationwide treasure.”

Coca-Cola’s marketing Christmas trucks due to sugar’s role in rotting children’s teeth and which makes them fat. Coca-Cola Classic, containing 10.6g of sugar per 100ml, will fall under the greater tax band, as the new Irn-Bru – with four instead of 8.5 teaspoons of sugar per can – is going to be exempt.

In the last year supermarkets happen to be reformulating their very own brands fizzy drinks to prevent the tax although this week Waitrose banned sales of so-known as energy drinks to under-16s, among growing concerns about high amounts of sugar and caffeine.

Coca-Cola stated it had been in discussions with retailers concerning the impact from the sodas tax on Coca-Cola Classic. “These discussions include reviewing those sizes provided to consumers and our method of cost-marked packs,” a spokesman added.

As the sodas giant continues to be prepared to alter the ingredients of other drinks in the portfolio, including Sprite, Fanta and Dr Pepper, its desire not to tamper with Coca-Cola is understandable.

Among the darkest hrs within the Coca-Cola company’s 125-year history arrived 1985 if this altered its famous secret recipe. That which was billed as “new Coke” would be a marketing disaster, sparking an enormous consumer backlash that forced the organization to revert towards the original taste 79 days later.

As the thinking behind the sugar tax has generally been well accepted by consumers, they’ve found some drinks harder to swallow without the sugar. Based on industry data sales of Lucozade, of Japanese drinks group Lucozade Ribena Suntory, slumped 4% this past year as some drinkers were not impressed with the flavour.

Duncan Maker, someone at consultancy firm Oliver Wyman, stated it might be interesting to determine what method of coping with the sugar tax was probably the most effective.

“I’m not surprised Coke is unwilling to reformulate because of the ‘new Coke’ debacle,” stated Maker. “But they likewise have the negotiating capacity to pass the cost rise onto retailers. I believe they won’t eat the price of the tax themselves. A.G Barr is really a smaller sized player so less able to perform so, so has already established to consider this riskier move.”

AG Barr stated it’d run plenty of taste tests which nine from 10 regular Irn-Bru drinkers couldn’t taste the main difference. “The majority of our drinkers wish to consume less sugar so that’s what we’re now offering,” stated a spokesman.

Allen remains hopeful AG Barr will re-think its decision to tamper using the “ginger”. But when his petition fails he advises customers to election using their ft: “Once the pish water hits the shelf in The month of january #boycottbarrs.”

Poundland&aposs owner safeguards loan to lessen reliance on battling Steinhoff

Poundland’s European owner has guaranteed a £180m loan from the US hedge fund to lessen reliance on its troubled South African parent Steinhoff and reassure spooked suppliers.

Pepkor Europe, which owns Steinhoff’s European discount stores, stated that it’ll no more need to depend “on capital support from parent company Steinhoff International”.

The 2-year loan facility, supplied by US investment management firm Davidson Kempner, can help Pepkor to aid its United kingdom operations and fund future investment.

Pepkor stated the borrowed funds provides stability because of its retail brands which was “business-as-usual” in the stores, and for its 29,000 employees across Europe.

Additionally, it stated that the proportion from the loan facility could be distributed around Harveys and Bensons for Beds – which belong to Steinhoff but fall outdoors from the Pepkor umbrella – to aid the long run development of individuals companies within the United kingdom.

Andy Bond, leader of Pepkor Europe, stated the organization was “firing on all cylinders, adding customers and growing market share”.

“Because of the strength, regardless of the ongoing issues faced by our parent company, we’ve been capable of working rapidly over Christmas to activate new causes of funding that will us to reassure suppliers, implement our investment plans and secure the way forward for these effective companies,” he stated.

Poundland reported on Wednesday it had enjoyed its most effective Christmas because it started buying and selling in 1990, with sales growing at 5.6 percent for that 12 days to 24 December.

South-African store Steinhoff is embroiled within an accounting scandal which has easily wiped millions off the need for the firm and seen numerous senior executives resign.

Shares within the firm have plummeted almost 90 percent because it accepted earlier in December it had become being investigated for “accounting irregularities”.

On 5 December, Chief executive officer Markus Jooste walked lower.

Later within the month, the group’s chairman and largest shareholder, Christo Weise, resigned.

On Tuesday, the audience stated it may likely need to restate its financial statements for a long time just before 2015 too. Formerly it’d stated the accounting irregularities only returned so far as 2016.

A week ago, Moody’s slashed its rating for the organization for again in just per month and cautioned of the potential of further downgrades. A lesser credit score implies that a business is considered not as likely so that you can service its debt.

Pepkor Europe owns Poundland, in addition to retailers Dealz in Germany, Pep&Co in The European Union and PEPCO in Eastern Europe.

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Why South American aviation scene is unrecognisable today from the recent past

For forty-five minutes after pushback, the Avianca Airbus from Bogota to Quito dawdled inside a lengthy queue of aircraft waiting to consider off each morning hurry.

My first thought: tell the airport terminal to Gatwick or Heathrow and get how you can extract more capacity from runways.

My second thought: my, how aviation in South Usa has altered.

Within the 1990s, I had been a regular flyer for this glorious if troubled continent. Each flight had two characteristics (well, three should you count a faint but pervasive feeling of danger): these were ridiculously costly, and there wasn’t any hanging out. When everybody was considered to be board and also the door closed, it took five minutes maximum before you decide to were airborne.

Except once, flying in the Ecuadorean capital, Quito, towards the capital of scotland- Tulcan around the northern frontier with Colombia. The plane was run by the environment pressure. Then when three officials showed up after departure time, as the little Fokker was still being on the floor, the captain dutifully taxied to the terminal to get them.

Since that time, two big national carriers have disappeared: Varig of South america, subsumed in to the low-cost air travel Gol, and Viasa of Venezuela – a nation that has almost fallen from the air travel map because of the bizarre economic policies from the government in Caracas.

As the Argentinian flag carrier continues to be going, its ambitions are reduced. You will not find Aerolineas Argentinas selling cheap flights from Heathrow to Paris and Madrid nowadays. Within the 1990s, tickets for that European sectors were offered through “bucket shops”, and you can have a Jumbo one method to Paris just for £55 – a fantastic bargain at that time.

In the airline’s Buenos Aires HQ, the term increíble continues to be uttered more often than once concerning the threat that touches lower the following month. Love Day 2018 might find the maiden flight from the longest ever nonstop route from Gatwick: a brand new connect to Buenos Aires. The air travel is Norwegian, from the small , faraway country, and which permanently measure is establishing a low-cost domestic subsidiary within the Argentinian capital.

Norwegian Air in Argentina will face competition from Lan, that has expanded within the Andes from Chile to Argentina, north to Peru and Ecuador, and partnered with Tam of South america to produce a pan-South American carrier: Latam. British Airways appears disinclined to maneuver to South Usa greatly. Buenos Aires, Santiago, Rio and São Paulo are year-round from Heathrow, however the Gatwick-Lima route stopped in the finish of October and it has become summer time-only.

BA’s relative insufficient interest in in South Usa is understandable due to Iberia’s presence BA and also the Spanish air travel are members of exactly the same firm, IAG.

Which leaves some room for Colombia’s Avianca, with a nightly departure from Heathrow to Bogota and connections over the Andean nations, a great status for safety and a more youthful fleet. 

Within the 1990s you can lessen the painful price of South American airline travel by purchasing an Avianca airpass. A few of the flying ended with a subsidiary named Mike. After I switched up in the airport terminal on San Andres island for any flight to the landmass run by a Boeing 727 in the lately deceased Dan-Air London, most abundant in half-hearted of efforts to rebrand the jet, aboard, you can hardly move for badly stowed electrical goods, purchased at duty-free prices around the island.

The inflight services are rather much better than I recall: once the 70-minute hop from Bogota to Quito finally required off, everybody in economy got food, drink, inflight entertainment and mains power.

Fares could be lower: you will be challenged to locate a seat from Bogota to Quito for much under £200, unless of course you purchase this flight included in an worldwide itinerary. And Bogota airport terminal can always be pushing it to explain itself as El Dorado (“The Golden One”). But it’s a good, modern facility that will fit in well in the european union or Southeast Asia. It’s the hub for any thriving nation that is now correctly into the spotlight for tourism. Hurry to Colombia for spectacular scenery, wealthy culture and outstanding beaches, prior to the queues get a lot longer.

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European Regulators Open Analysis Into Ikea’s Taxes

European regulators on Monday opened up an analysis in to the tax structure from the furniture store Ikea, the most recent inquiry inside a attack on potential tax evasion by multinational corporations.

The Ecu Commission, the ecu Union’s executive arm, stated it had been concerned that tax rulings within the Netherlands might have permitted Inter Ikea, among the company’s operating divisions, to pay for less tax since 2006, and could have provided it “an unfair edge on others,” in breach of European rules on condition aid.

“All companies, small or big, multinational or otherwise, should pay their great amount of tax,” Margrethe Vestager, the bloc’s top antitrust official, stated inside a statement. “Member states cannot let selected companies pay less tax by letting them artificially shift their profits elsewhere.”

Ikea, noted for its flat-pack furniture, reported revenue of 36.3 billion euros, or about $43 billion, in the 2017 financial year, which led to August.

Inside a report this past year, the ecu Eco-friendly Party stated that Ikea could avoid an believed €1 billion in taxes from 2009 to 2014 due to its corporate structure.

Their business design was altered to some franchise structure in early 1980s, with Inter Ikea operating its franchise business. Inter Ikea, via a Nederlander subsidiary, receives franchise charges comparable to 3 % from the revenue from Ikea stores worldwide, based on regulators. Although Ikea began in Norway in 1943, parents clients are located in the Netherlands.

European regulators are worried particularly in regards to a 2006 Nederlander ruling that permitted Inter Ikea to transmit an essential part of their franchise profits, by means of a yearly license fee, to some company in Luxembourg, where it wasn’t taxed.

Investigators are also searching in a subsequent ruling through the Nederlander government bodies this year after European regulators considered the Luxembourg tax structure illegal under condition-aid rules. That ruling endorsed one that permitted Inter Ikea to transmit a substantial part of its franchise profit, via interest compensated under an intercompany loan, to some Liechtenstein company.

The Ikea inquiry may be the latest in number of investigations by European regulators since 2013 in to the tax structures of multinational companies operating in Europe and just how they’re treated through the local tax government bodies.

The Ecu Commission has purchased several people from the 28-nation bloc to gather vast amounts of euros at the spine taxes from companies including Amazon . com, Apple, Fiat and Starbucks.

This season, the commission required Ireland to the court following the country declined to gather €13 billion from Apple in delinquent taxes carrying out a 2016 decision by European regulators.

The commission is also investigating Luxembourg’s management of McDonald’s as well as Engie, formerly referred to as GDF Suez, along with a tax program for multinational companies in great britan.

Arms budgets hitting highs not seen since Cold War

Growing global tensions mean ­defence spending is going to hit its greatest level because the Cold War peak from the Eighties.

Data prepared solely for that Telegraph by IHS Markit Jane’s defence analysts forecast that arms spending will hit $1.67 trillion in next season – overtaking the current high observed in 2010 of $1.63  trillion.

Little data exist concerning the Soviet Union’s defence spending once the Cold War what food was in its most intense, but Jane’s experts think that within the mid to late Eighties global funding for defence was between 10pc and 20pc greater compared to current level.

The entire expected spending for 2018 is 3.3pc on last year’s figure and it is being driven through the US – the world’s best funded military, comprising 40pc of worldwide defence budgets.

American forces are anticipated to profit from the 4.7pc funding increase under President Jesse Trump to $673.3bn in 2018.

The arms budget in great britan – the world’s 4th greatest defence spender – is anticipated to edge up 1.2pc to $51.8bn in 2018, ongoing the reversal which began in 2017 of the lengthy-running downturn in spending for arms and troops. The United kingdom defence budget fell by typically 1.7pc annually underneath the Coalition government from 2010 to 2015, however this led to 2016 once the Conservatives promised to improve spending by .5pc and it at 2pc of GDP.

Jesse Trump address American troops. The United States makes up about 40pc of worldwide defence spending and also the president has vowed to bolster the nation’s forces Credit: AP

This level was viewed as enough to finance the £178bn equipment plan visiting 2025/26 to package the UK’s forces with equipment including new domestically built aircraft carriers and submarines, in addition to buying P-8 spyplanes, Apache helicopters and F-35 fighters in the US. However, Fenella McGerty, principal analyst at Jane’s, cautioned the fall in sterling because the EU referendum minimizing projections from the UK’s economic growth imply that the spending plans have reached doubt.

She added: “Sterling what food was in $1.55 once the equipment plan was set but has become at $1.34, causing us to be-based equipment programmes much less affordable.

“If the reduced worth of the pound from the dollar persists, programme reductions will end up much more likely.”

She added that vast amounts of pounds of planned savings the MoD wished to locate haven’t yet been identified, raising further doubts about if the UK’s forces can get the package these were ­expecting. kingdom/edit?id=400931aa-4137-4179-8e59-175d48791730

Britain’s defence finances are growing gradually

The present overview of britain’s forces – that has elevated the possibilities of the Navy’s amphibious landing ships and 1,000 Royal Marines being cut – to create savings to create other purchases possible is “highly necessary”, Ms McGerty stated.

She added: “If another ‘black hole’ emerges, the MoD could again face personnel and equipment cuts ­although the magnitude rarely is in up to individuals identified within the 2010 defence review.”

Jane’s research also highlighted stabilising defence spending in European nations following a lengthy duration of decline, with regional outlays on defence likely to rise by 1.3pc in 2018.

“Defence spending development in The European Union will largely be driven stabilising government balance sheets, the perceived threat from Russia on NATO’s eastern border, and many key procurement programmes coming online,” Ms McGerty stated. 

Sterling’s fall makes the F-35 fighter the United kingdom is buying more costly because it is priced in dollars Credit: SAC Tim Laurence/MoD

Worries a good more and more ­aggressive Russia – within the wake of Vladimir Putin’s annexation of Crimea in 2014 – make Eastern Europe the location using the fastest growing ­defence spending.

In 2018, military spending within the Baltic is going to be double the amount level it had been in 2014 in tangible terms.

However, Russia’s defence expenses are likely to decline for any second consecutive year running in 2018, lower to $43.1bn, ranking it as being the sixth largest spender on the planet, behind Saudi Arabia.

The 2nd and third greatest spenders are forecast to become China at $203.3bn and India at $54.8bn.

So as, the very best 10 greatest spending militaries in 2018 are forecast to become: US at $673bn China at $203.3bn India at $54.8bn United kingdom at $51.8bn Saudi Arabia at 51.8bn Russia at $43.1bn France at $46.4bn Japan at $44.2bn Germany at $38.5bn and Columbia at $36.7bn.

From paradise to blacklist: EU’s internet begins to close on tax havens

When Europe’s finance ministers sit lower to some working breakfast in The city on Tuesday, after deciding whether or not to order the continental or even the full British, the British delegation is going to be confronted with a level tougher decision.

Chancellor Philip Hammond and the counterparts is going to be requested to approve a summary of individuals countries, island states and former colonies that the Eu has considered to become “non-cooperative jurisdictions”. Put more plainly, the EU is going to be announcing a blacklist of tax havens.

Coming because it does under per month following the publication from the Paradise Papers – an analysis through the Protector and 95 partners worldwide right into a leak of 13.4 million files from two offshore providers – the announcement is hotly anticipated. Campaigners, lobbyists and politicians on sides from the offshore debate take presctiption tenterhooks.

For the type of small island economies whose GDP depends upon selling secrecy and regulations and tax breaks, a blacklisting might be devastating, especially if The city follows track of a number of sanctions for conducting business during these countries.

Speculation about who definitely are put on the EU’s naughty step has arrived at fever pitch. The most recent draft, based on reports a week ago, contains 20 names, lower from the possible 92 at the outset of the entire year. Time might be further whittled lower – the horse-buying and selling is ongoing to the wire. So fierce may be the believe that some believe publication may be postponed.

“The finance ministers from the member states mustn’t let political factors cloud their judgment when saying yes their final list in a few days,Inches states the influential tax reform campaigner and German MEP Sven Giegold.

Among the big questions is the number of, or no, people from the UK’s sprawling offshore network is going to be named.

Any decision taken by ministers must be unanimous. Britain might be exiting Europe, however it maintains its veto until 2019 and Theresa May’s government continues to be pulling every lever to safeguard its dependencies. Whitehall sources have confirmed that individuals Caribbean territories which endured probably the most damage in this year’s devastating hurricanes will be presented additional time to have their house so as.

It’s been reported that seven jurisdictions, not every one of them British, happen to be given a brief reprieve to be able to get over the harm. This will probably mean the British Virgin Islands, Montserrat and also the Turks & Caicos Islands – which are United kingdom territories that required a battering from hurricanes Harvey, Irma and Maria – are secure for the time being.

They could be incorporated on the “grey” list. This second register will name jurisdictions presently serving as tax havens which have told the EU they plan to enhance their transparency, information discussing and tax rules. The gray list might be published, or ministers could decide it ought to remain unpublished for the time being.

Leading the work is Frenchman Pierre Moscovici, in the role as finance commissioner. He has worked onto it for 2 years. “I hope that in a few days this blacklist is going to be made the decision making public,” he stated. “There should be no delay with no compromise.”

In The month of january this season, 92 countries received a screening letter. They incorporated a few of the world’s greatest states, including China, the united states and Japan small Countries in europe for example Monaco and Andorra and small third world countries for example Niue within the Off-shore. These were informed they could be assessed against three broad criteria: tax transparency fair taxation and dedication to applying measures agreed through the OECD meant to stop countries stealing each others’ tax bases.

The commission has printed specific measures through which countries can generate the brownie points required to stay from the list. Included in this are joining the most popular reporting standard, which sees countries invest in discussing info on accounts held by people who are not their very own citizens. What they are called of banking account holders are handed annually towards the tax government bodies of individuals individuals’ home countries.

An organization tax rate of zero isn’t alone a black mark, however the country shouldn’t facilitate offshore structures or give regulations and tax breaks to companies without any real presence within their jurisdiction.

In October, the commission authored to 41 countries warning they’d unsuccessful the exam and were apt to be blacklisted, unless of course they guaranteed to alter their ways. None were British territories – pressurized from Westminster, The city had agreed to have to wait. Then your ground shifted once again.

Tales started appearing within the press that the major new offshore leak involved to become printed through the team behind last year’s Panama Papers. The Isle of individual known as within the Treasury to examine $1bn (£740m) of VAT refunds it’d issued to personal jet proprietors. 5 days prior to the publication from the Paradise Papers, Jeremy Corbyn selected in the cudgels, marvelling at just how 957 private jet proprietors had selected to join up their aircraft on a single small island.

Pierre Moscovici: ‘There must be no delay and no compromise.’ Pierre Moscovici: ‘There should be no delay with no compromise.’ Photograph: Anadolu Agency/Getty Images

“When you are looking at having to pay taxes,” Corbyn told May, “there’s one rule for that super-wealthy and the other throughout us.”

A couple of days later, Britain relented. The commission fired off letters to some further 12 tax havens, such as the Isle of individual, Bermuda and also the Caymans.

Since that time, May’s government seems to possess obtained some sway. Sources near to the process say United kingdom dependencies will probably feature around the gray list if they’re named whatsoever.

Moscovici wants the gray list published, and it has provided to behave as a monitor, making certain the guaranteed enhancements are delivered. He claims transparency is the greatest weapon against tax evasion, telling MEP’s a week ago: “Those who practice fiscal optimisation are similar to vampires. They fear the sunshine.Inches

Inside a draft dated 21 November and seen by Bloomberg, the 36 countries named incorporated Panama, Tunisia, Serbia, Armenia, the Prepare Islands and also the Marshall Islands. There’s been talk of adding Poultry. The United States, despite to be the location of secrecy states like Delaware and Wyoming, where companies could be setup without declaring the master of them, is certainly not out there. Neither is Europe. Most controversially, no EU country is going to be named.

“Hypocrisy about this front has a tendency to turn from the blacklisting power,” the campaign group Tax Justice Network cautioned a week ago because it printed its very own blacklist.

While using EU criteria, it singles out 41 countries, six which are EU member states with a combination of low tax rates, poor transparency, and generous deals available to multinationals. They’re Cyprus, Ireland, Luxembourg, Malta, Netherlands – and also the Uk.

The Eco-friendly MEP Molly Scott Cato also believes that, after Brexit, Europe might have the ability to pressure through more change.

“The EU should make use of the chance of Brexit to blacklist the United kingdom overseas territories and pressure the federal government to finish their poisonous tax secrecy,” states Scott Cato. “The EU must be obvious that it’ll not sign a totally free trade agreement using the United kingdom until its cleans up its act upon tax.”

Who Definitely Are Out There?

Inside a recent report, Blacklist or Whitewash?, Oxfam applied the factors the EU is applying to attract in the blacklist to 92 countries screened through the union and it is 28 member states. The factors exclude EU member states, but when they didn’t, Oxfam figured that four countries ought to be blacklisted: Ireland Luxembourg Holland Malta.

Additionally, it figured that 35 non-EU states ought to be out there: Albania Anguilla Antigua and Barbuda Aruba Bahamas Bahrain Bermuda Bosnia and Herzegovina British Virgin Islands Prepare Islands Caymans Curaçao Faroe Islands Macedonia Gibraltar Greenland Guam Hong Kong Jersey Marshall Islands Mauritius Montenegro Nauru New Caledonia Niue Oman Palau Serbia Singapore Europe Taiwan Trinidad and Tobago UAE US Virgin Islands Vanuatu.

Hard Brexit highly damaging, states former top civil servant

There’s no trade deal available in the Eu which will stop Britain going for a major economic hit after Brexit, the government’s former top trade official has cautioned.

Inside a direct warning to MPs, Mister Martin Donnelly, the main civil servant in Liam Fox’s Department for Worldwide Trade until captured, claims that departing the only market towards negotiating a lengthy-winded, Canada-style trade deal will “damage United kingdom competitiveness and then leave us with less investment, lower living standards and lengthy queues in the border”.

Donnelly, who left the trade department captured and that has extensive experience employed in The city, writes within the Observer that there’s no credible free trade deal available “able to provide the guaranteed market access, shared regulation and consumer protection that Britain needs”.

“Vote to depart the only market should you must. But get it done together with your eyes open,” he informs MPs. “Wishful thinking doesn’t create well-compensated jobs, pay taxes or fund public services.”

He warns that departing the EU’s legal structures leaves Britain “more protected, more controlled and poorer”.

leaked European commission document recommended that Britain wouldn’t be offered a bespoke trade deal granting accessibility single marketplace for products or services. Additionally, it has the government fighting to have a Brexit crisis on several fronts: it might face a Commons defeat as soon as Tuesday more than a digital rebel attempt to make sure that the EU’s Charter of Fundamental Legal rights retains effect after Brexit.

The Observer has additionally found that senior legal figures within the Lords are poised to make sure that rulings through the European Court of Justice (ECJ) have a location in United kingdom courts after Brexit.

Lord Pannick QC, who defeated the federal government in the court over its make an effort to trigger Brexit with no election in parliament, stated he’d part of to alter the EU withdrawal bill if ministers didn’t clarify the “uncertainty” over EU law after Brexit day.

“We need clearness on whether idol judges should, apart from in exceptional conditions, follow judgments from the European Court of Justice around the retained EU law which is a part of domestic law after Brexit,” he stated. “[The present bill] gives insufficient guidance to the idol judges.

“When the withdrawal bill involves home of Lords, I’ll be tabling an amendment to want domestic courts to interpret retained EU law consistently using the judgments from the court of justice handed lower publish-Brexit, unless of course the domestic court is content there are exceptional reasons to avoid so.

“Such an amendment is made to promote legal certainty, and also to ensure consistency between your retained EU law and also the same laws and regulations in Europe, that is particularly important to advertise do business with Europe, to make sure freedom of services, for data protection, safeguarding the atmosphere, protecting employment legal rights as well as in a number of other fields.”

Lord Pannick

Lord Pannick: ‘We need clearness on whether idol judges should, apart from in exceptional conditions, follow judgments from the European Court of Justice.’ Photograph: Dan Kitwood/Getty Images

That move will infuriate Brexiters as well as contradicts Theresa May, that has made jurisdiction from the ECJ a red line in Brexit talks.

Meanwhile, senior ministers have a crunch meeting on Monday over how you can unlock Brexit talks using the EU, with foreign secretary Boris Manley wanting guarantees more than a future trade deal before investing in a significant rise in divorce bill.

In the Observer article, Donnelly spells the benefits Britain enjoys from the single market membership can’t be replicated inside a trade deal. He urges MPs unsure by what make up the final Brexit deal must take to purchase themselves time by backing temporary membership from the European Economic Area, which will come with single market access, for any transition period. Doing this allows additional time to “see when we will find a practical alternative that fits our economic needs”.

“Please don’t discard our hard-won competitiveness, our understanding-based economy which pulls global talent and investment, and our effective services sector due to false promises that people can leave the only market and everything is going to be fine,” he warns MPs. “That isn’t exactly what the details inform us.Inches

An identical warning was already from Mister Ivan Rogers, the previous ambassador towards the EU, who stated there would be a “radical difference” between your free trade arrangement that Britain could be offered and membership from the customs union and also the single market it had become quitting.

A senior EU official hit back against David Davis’s claim throughout a speech in Berlin a week ago the United kingdom should have a better deal than Norwegian, because of its comparative size. The state in The city told the Observer, however, that suggestions from British politicians the United kingdom could remodel its economy to become a lot more like Singapore had cut right through to EU leaders.

“They say ‘But we’re a large country therefore we could possibly get something much better than Norway’. My response is ‘no, it’s the alternative way round’. Norwegian is really a fisheries and oil economy. They aren’t a rival. You, the United kingdom, really are a competitor. Particularly with regards to safeguards against various dumping. Threats happen to be made and safeguards must be introduced.”

Meanwhile, companies will also be growing their lobbying within the results of departing the EU without any deal. The tourism industry has independently cautioned that 25,000 jobs held by Britons working in the market in Europe, in addition to £1bn in tax revenue, are in risk.

Eloise Todd, mind from the pro-Remain Perfect for Britain campaign, stated: “In a few days from the budget, this really is further evidence that we’re facing a Brexit black hole in the centre in our economy.”

Goldman Sachs boss talks up Frankfurt as Brexit talks loom

Goldman Sachs stacked pressure on Theresa May prior to a crunch European summit by ridiculing London’s about staunching the flow of lucrative banking jobs after Brexit.

Inside a teasing tweet that taken growing business anxiety within the direction of talks, the united states bank’s leader, Lloyd Blankfein, authored on Thursday he likely to be “spending much more time” in Frankfurt to any extent further.

Lloyd Blankfein (@lloydblankfein)

Just left Frankfurt. Great conferences, great weather, really enjoyed it. Good, because I will be spending much more time there. #Brexit

October 19, 2017

Blankfein’s comment recommended by using no clearness on the Brexit deal, the united states investment bank is able to make its contingency plans a real possibility. The timing from the intervention coincided using the European council summit in The city, where leaders of other EU countries are anticipated to rebuff May’s appeal for trade talks.

Goldman has formerly run a lot of its European business from headquarters working in london, like the majority of investment banks, but continues to be more and more vocal about the necessity to move operations towards the EU if Britain leaves the only market with no substitute trade offer place.

Two days ago it revealed it had been leasing eight floors inside a new Frankfurt tower block that may soon support 1,000 staff. It presently employs 6,000 individuals the United kingdom, where it’s been expanding offices on Fleet Street, versus just 200 within the German financial center.

Answering the tweet, a Downing Street spokesman stated: “We’re not likely to discuss a person statement. But let’s be obvious, London is and can remain the world’s leading financial center.

“We possess the breadth of talent, legislation, regulation and deep pools of capital which are simply unrivalled by centres elsewhere in Europe and we’re confident of securing an ambitious economic partnership using the EU which will include financial services.”

Tarnished through the banking crash, the face area of Wall Street’s most questionable investment bank can always have limited political influence among voters, but Blankfein’s intervention comes among growing indications of business drying out across Britain.

A study going to be out on Monday in the Engineering Employers’ Federation (EEF) is anticipated to exhibit that 1 / 2 of manufacturers are putting investment on hold as politicians more and more talk of the “no-deal” Brexit.

The annual EEF survey found another of companies stated that they are dedicated to current plans but waiting for a Brexit deal before investing further, having a further 13% revealing these were now suppressing on all investment.

More dire business warnings are anticipated on Friday using their company employers’ groups in great britan when the EU summit does not generate worthwhile news around the direction of Brexit talks.

But it’s the view of leading worldwide business figures now freely mocking Britain’s position that may cause most short-term anxiety, especially given their role in steering broader investment sentiment.

This month Mike Forest, a deputy governor in the Bank of England, cautioned that City firms would activate their Brexit contingency plans if there wasn’t any deal on the transition period by Christmas.

Major banks including JP Morgan, Standard Chartered and Bank of the usa are among individuals to announce intends to expand operations in other European metropolitan areas to handle the aftermath of Brexit.

Frankfurt is among the frontrunners among a number of European metropolitan areas wishing to draw in banking and financial services jobs from London after Brexit, as firms seek guaranteed accessibility single market. Dublin, Paris, Madrid, Amsterdam and Luxembourg will also be vying for City jobs.

Inflation hits its highest level in five-and-a-half years; MPC right to cut interest rates after Brexit vote says Carney

  • Inflation rises to 3pc, its highest level in five-and-a-half years; the increase will crank up the pressure on the Bank of England to hike interest rates next month to curb inflation
  • RPI remains at its highest since 2012; business rates will jump by 3.9pc next April as a result
  • Sterling sinks as Mark Carney speaks at a select committee; the pound falls 0.7pc against the dollar to below $1.32
  • FTSE 100 nudges higher as the pound retreats; theme park owner Merlin nosedives 20pc after a “difficult” summer of trading, blaming terrorism and bad weather

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Virgin Money insists its credit card business is safer than the bigger banks

Virgin Money chief executive Jayne-Anne Gadhia

Virgin Money has insisted it has a safer credit card business than Britain’s big banks, amid growing fears over ballooning consumer credit.

The challenger bank’s chief executive Jayne-Anne Gadhia told analysts today the company had conducted its own “extreme” in-house stress test of its expanding credit card book and found in a downturn it would face fewer problems than its peers.

Last month the Bank of England warned lenders they risked losing as much as £30bn on personal lending if the economy took a turn for the worse, with as much as a quarter of credit cards defaulting.

But Ms Gadhia said Virgin’s own credit card business – which has grown balances to £2.9bn – would fare better than its peers.

Read Iain Withers’ full report here


Dow Jones on course for another record finish; US industrial production rebounds

The Dow Jones has nudged up 0.1pc

US markets have opened and the Dow Jones has nudged up into positive territory, leaving it on course for another record finish. 

The index has been dragged up by UnitedHealth’s 4.8pc jump on hopes that a decline in medical costs at the health insurer could boost full-year figures.

There’s a bit of economics data to update you with from the States this afternoon. 

Industrial production growth bounced back in September to rise by 0.3pc after being disrupted by hurricane season the previous month. 

Paul Ashworth, chief US economist, said there were still “signs of disruption evident last month, leaving scope for a much bigger rebound in production in October”.

He added:

“Overall, with global trade and economic growth booming and the dollar still down substantially from its peak early this year, the outlook for US manufacturing looks bright. That optimism comes through in the upbeat survey evidence. As a result, we expect solid gains in manufacturing output in the fourth quarter.”


Revolution Bars suitor leaves empty handed as investors reject £100m bid

Investors have left Revolution Bars shaken after rejecting a cash offer for the company

Shares in Revolution Bars dropped as much as 8pc after a second potential suitor in two weeks was left unable to secure a deal.

Stonegate, the owner of the Slug & Lettuce chain, had bid 203p a share for its rival, valuing the chain at £100m. But it failed to secure shareholder support for its cash offer, sending the target’s shares down to 176p.

Owners of just 60pc of Revolution’s shares voted in favour of the Stonegate bid at each of the two separate Court and General meetings held by the company to allow investors to express their view on the deal.

To be successful, the bid needed 75pc of shareholders to vote in favour.

Read Bradley Gerrard’s full report here


Asos profits double as overseas growth offsets weak pound

Asos makes two thirds of its sales overseas

Asos profits have doubled in the past year as the online retailer’s rampant overseas expansion allowed it to storm past its struggling British high street rivals.

The fashion site has delivered a 145pc jump in pre-tax profits to a record £80m while group sales have surged by 33pc to £1.9bn in the year to August 31.

Asos’ upbeat numbers are partly down to the rapid consumer shift from traditional bricks and mortar shopping to clicks on mobile devices. This has resulted in the online fashion market growing at twice the rate of the overall fashion sector over the last five years.

However, Nick Beighton, Asos boss, said that it was “not enough to just be online”. He added: £There has been a continual channel shift as twentysomethings use their mobile phones, but you can’t just be digital, you’ve got to be selling what people want to buy.”

Read Ashley Armstrong’s full report here


Pearson stems decline in key US market

Pearson chief executive John Fallon is under pressure

The troubled education giant Pearson has suffered a further decline in its core American textbook business in the third quarter but avoided its worst fears, to the relief of investors.

On the back of a string of profit warnings, Pearson said the improved trend meant it could narrow its full-year profit forecast to the upper end of the range.

The company, which has cast off media assets such as the Financial Times to focus on education in recent years, now expects a minimum adjusted operating profit of £576m. The previous lowest prediction was £546m.

The improvement reflects a 5 percentage point cut to Pearson’s expected tax rate for the year to 16pc following the “favourable outcome of certain historical tax issues”.

Read Christopher Williams’ full report here


Inflation hits 3pc as cost of living squeeze intensifies 

Prices jumped by 3pc in the past year, the fastest rise in more than five years as imported inflation and higher energy prices pushed up the cost of living.

Food prices climbed as inflation in staples such as bread, rice and meat accelerated in September, while transport costs also rose as petrol became more expensive.

Computer games and theatre tickets also dragged up the consumer price index, the Office for National Statistics said.

Read Tim Wallace’s full report here


Carney grilling ends

Bank of England governor Mark Carney

Final question is about the gender pay gap and he replies that the gap is 24pc on a median basis at the Bank of England and 21pc on mean basis.

He says they are in the middle of a deliberate strategy of changing this at the central bank.

And with that, it’s over. Nothing much new there to be perfectly honest. He defended, as he always does, quantitative easing and the interest rate cut taken shortly after the Brexit vote while also allaying fears about ballooning household debt.

Sterling took a bit of a battering during that appearance, sinking 0.7pc to below $1.32 against the dollar and 0.3pc against a basket of the leading currencies.


Carney on QE: We’re clean and not addicted

We’ve move onto quantitative easing and Mr Carney is given a quote comparing it to heroin.

Extending the metaphor, he replies: “We’re clean and not addicted to QE or will go through withdrawal symptoms.”

He adds that the Bank of England will not just unwind for fun and prove a point, adding that the central bank will observe the Fed’s balance sheet unwinding programme.


Household debt only requires macro-prudential response

When asked if he is too relaxed on household debt, Mr Carney says that the Bank of England is taking action on household debt but to an appropriate degree. It only merits a macro-prudential response, adding that “we’re never relaxed about anything”. 

On Government fiscal policy, he says that he will not and cannot give his opinion and when asked if Help to Buy has pushed up house prices, Mr Carney says that it hasn’t had a multiplier effect on supply.


Carney: We shouldn’t take the lead on Brexit from the markets

Moving onto household debt, Mr Carney is relatively upbeat. He explains away fears of a car finance bubble and says that the quality of “borrowers has gone up substantially”. 

We shouldn’t take the lead from the markets on Brexit given its complexity, he adds. It matters more how households and businesses react.


New BoE policymakers lean on the dovish side

New deputy governor Sir Ramsden is not ready to vote for an interest rate hike

I missed new Bank of England policymakers Silvana Tenreyo and Sir Dave Ramsden’s grillings this morning but fortunately Reuters was watching. Here’s what happened:

New Bank of England rate-setter Silvana Tenreyro said she was not ready to vote to raise the Bank’s record low interest rates in November although she might do so in the coming months if inflation pressure builds in Britain’s labour market.

“My view is that we are approaching a tipping pint at which it would be necessary or justified to remove some of that stimulus,” she told British lawmakers on Tuesday.

New deputy governor Dave Ramsden said he was not close to voting for an interest rate hike, raising some questions for investors about when the BoE would make its widely expected first hike in more than a decade. 

Deputy Governor Dave Ramsden said he was not part of the majority of BoE policymakers who believe a rate hike is likely to be needed “in the coming months” because he saw little sign of inflation pressure building in Britain’s labor market.

They’re still questioning Mr Carney but the debate has centered on Brexit on which the governor can’t give many certain answers. They’ve just moved onto household debt. I must admit this select committee is lacking some teeth, he’s having quite an easy ride.


Sterling sinks against the dollar as Carney speaks

Since Mr Carney started speaking the benchmark 10-year Gilt yield has fallen 3.2 basis points to 1.30pc. Meanwhile on the currency markets, against a basket of the leading currencies, the pound has sunk to a 0.2pc loss for the session while against the dollar sterling has slipped 0.6pc to $1.32.

Spreadex analyst Connor Campbell commented on the appearances by MPC members this morning:

“There were conflicting messages from the BoE this Tuesday. The central bank’s newest deputy governor, Sir Dave Ramsden, stated he wasn’t one of the MPC members who said they were close to raising rates last month. In contrast, policymaker Silvana Tenreyro said she would be ‘minded to vote for a bank rate increase’ if the UK’s data justified it.  

“As for head honcho Mark Carney, he dismissed a question from the Treasury Committee asking whether it would be wise to raise borrowing costs in order to give the BoE room to cut in the case of a recession, arguing that it isn’t ‘appropriate or necessary given that policy can move quite nimbly’.”


Carney warns against moving clearing out of London; BoE working on hard Brexit contingency plan

They move onto the subject of clearing and Mr Carney warns against moving clearing out of London, saying that fragmenting European clearing would create costs for the European real economy.

He adds that the Bank of England is working on a contingency plan for a hard exit without any transition period but believes there will be a transition deal.


Carney: Interest rate cut after Brexit was not unnecessary 

Mr Carney disagrees with a select committee member arguing that the interest rate cut after Brexit was unnecessary.

The pound has largely been determined by the prospects of the trade deal with the European Union. It was the markets judgement on how Brexit will affect real incomes. 

That will ruffle a few feathers.

Raising rates now to potentially support the economy later with a cut is not consistent monetary policy, he says to another question.

He also reiterates that the MPC believes that a hike in interest rates in the coming months will be appropriate.


Watch Mark Carney here


Mark Carney Treasury Committee appearance begins

Bank of England governor Mark Carney has just started his appearance at the Treasury Commitee.

He said that the Bank of England expects inflation to peak in October, admitting that it is likely that he will be writing a letter to the Chancellor explaining why inflation is so far from the 2pc target rate.

He emphasises that the effects of monetary policy takes time to feed through, adding that some factors pushing up inflation are out of the central bank’s control such as rising oil prices.


Attention turns to tomorrow’s wage growth reading

All eyes will turn to tomorrow’s wage growth reading, which is expected to remain flat and lag far behind inflation at 2.1pc. Back to the reaction to today’s figures.

Capital Economics’ UK economist Paul Hollingsworth believes that the Bank of England “will probably be focussed more on tomorrow’s wage growth figures for any signs that domestic cost pressures are building”.

He added:

“Nonetheless, the fact that this is the last set of inflation figures before the key MPC meeting on 2nd November, they will be a key factor in the Committee’s thinking. What’s more, September’s inflation figures are used for the uprating of some benefits.”

Kate Smith, head of pensions at Aegon, explains how today’s figures affect the Lifetime Allowance:

“This month inflation figures are uniquely important because they are used by the government to calculate the rise in the Lifetime Allowance (LTA) for the first time. The increase for the LTA in 2018/19 will be £1,030,000 based on today’s figures, and following a series of reductions it is welcome that the base-level is set to start growing again, even if on the surface the numbers aren’t large.

“Despite being small, this is a complex area, so those affected should seek financial advice to make sure their pension is protected from additional tax charges”

A quick sitrep on the pound. Sterling has nudged a little further down against the dollar to a 0.3pc loss for the session at $1.3250 while against the euro it remains 0.2pc higher at €1.1270.


Inflation reaction: Painful squeeze on consumers will ease next year

Inflation will exceed 3pc in October before falling back towards the 2pc target by the end of 2018, according to Pantheon Macro

Just a reminder that Mark Carney and two other Bank of England policymakers are currently appearing in a Treasury Select Committee and we’ll bring you the latest from Parliament as it comes.

Let’s have a look at what the experts made of today’s figures.

Pantheon Macro UK economist Samuel Tombs believes that inflation will slip below 2pc by 2019, meaning that the MPC will be discouraged from raising interest rates more than once in the next 12 months.

He added: 

“Inflation looks set to fall sharply in 2018, now that retailers have nearly completed sterling-related price rises.

“Domestically-generated inflation has remained muted; indeed, inflation in the services sector was just 2.7% in September, well below its 3.7% average in the decade before the recession.”

EY ITEM Club’s chief economic advisor Howard Archer believes that it would take a surprisingly weak earnings figure tomorrow and particularly poor third quarter GDP growth to stop the MPC from lifting interest rates next month.

The painful squeeze on consumers will begin to gradually ease during 2018, he added. 


Inflation key takeaways

  1. Inflation nudged up to 3pc in September, its highest level since April 2012. Inflation remaining far above the Bank of England’s 2pc target rate will crank up the pressure on the central bank to raise interest rates at next month’s Monetary Policy Committee meeting.
  2. The ONS said that rising prices on food and recreational goods along with transport costs were the main factors putting upward pressure on the reading.
  3. RPI remained flat at 3.9pc, an almost six-year high, meaning that business rates (which are determined by today’s figure) will rise substantially next April. This “will be the last straw” for many SMEs, said the Federation of Small Businesses.
  4. The increase in the headline figure was forecast by economists and thus the pound is unchanged following the release, remaining 0.2pc lower against the dollar this morning at $1.3260.

RPI reading will heap more misery on small businesses

Although the Retail Price Index reading came in flat at 3.9pc, a slightly softer figure than economists were expecting, it will heap more misery on small businesses, according to the Federation of Small Businesses.

Today’s RPI reading means that business rates bills will rise by 3.9pc next April and that increase “will be the last straw many” SMEs, its national chairman Mike Cherry said.

He added:

“Today’s RPI figure follows six months of business rates misery for our small business community. Since April’s bruising revaluation we’ve had the staircase tax, introduction of an unworkable appeals platform and chronic delays to the Chancellor’s £435 million relief package. A near four per cent bill increase next April, on top of losing year one transitional caps, will be the last straw for many.

“The Chancellor should give careful consideration to his inaugural Autumn Budget. The last thing our businesses need is new tax increases or loss of entrepreneurial reliefs.”


3pc inflation turns up the heat on the Bank of England; sterling largely unchanged

Mr Carney will not be dusting off the parchment and pen to write the chancellor to explain why inflation has veered so far from the Bank of England’s 2pc target rate and he has done it by the skin of his teeth.

While the rise to 3pc was expected, inflation hitting its highest point in five-and-a-half years will  turn up the heat on the Bank of England’s Monetary Policy Committee. 

The central bank’s policymakers have dropped some very strong hints in the last month or so on raising interest rates but this combined with reasonably solid economics data of late will make it very difficult for the MPC to leave the base rate unchanged in November’s meeting.

Meanwhile on the currency markets, sterling has barely budged an inch after today’s headline CPI figure came in line with economists’ forecast 


Inflation hits a five-and-a-half-year high

Inflation increased to 3pc in September, its highest level in five-and-a-half years. The reading was in line with economists’ forecasts but will crank up the pressure on Bank of England policymakers to raise interest rates at the next Monetary Policy Committee in November. More to follow…


Merlin shares plunge after terror fears hit attractions

Shares in the Legoland owner have plunged today

Shares in the owner of Madame Tussauds and Alton Towers tumbled in early trade as it revealed the impact of recent terror attacks on trading in the UK.

Merlin’s latest trading figures confirmed the hit from terrorist attacks on UK attractions in the peak summer months, which left group like-for-like revenue growth almost grinding to a halt, edging up 0.3pc in the 40 weeks to October 7.

Poor weather across the UK and Northern Europe and extreme weather in Italy and Florida were also to blame, according to Merlin. Shares plunged 19pc to 365p.

Merlin also unveiled a deal to roll out new Peppa Pig attractions worldwide. The agreement with Entertainment One – which owns the rights to the popular children’s cartoon character – is to develop new attractions and themed accommodation based on the pre-school favourite.

Read the full report here


Inflation preview: what the experts say

Let’s have a quick round-up of what the experts are saying ahead of today’s inflation figures.

CMC Markets analyst Michael Hewson explains how Bank of England governor Mark Carney could be put in an embarrassing spot this morning:

“If CPI rises by more than 1% above the banks 2% target Governor Carney will have the unenviable task of having to write to the Chancellor explaining why inflation is above target, and what the Bank intends to do about it.  

“He can’t very well say, well Phil it turns out that rate cut last year wasn’t such a good idea, but don’t worry we’ve got it in hand and we’re going to put rates back to where they were beforehand.”   

It could be a busy day for Mr Carney will all this letter writing and select committees. Although I imagine he’s had that inflation letter saved in his drafts for some time now.

 Spreadex analyst Connor Campbell provided this preview:

“That’s because investors are eagerly awaiting September’s inflation reading, which is set to see the consumer price index finally hit a 5 year high of 3.0%. Such a reading would put even more pressure on the Bank of England to raise rates, though that hawkish urge may be tempered by the continued fall in real wages (set to be confirmed tomorrow) and a sharp month-on-month drop in retail sales (coming on Thursday).  

“For now, however, the pound is focused on inflation. Cable is up 0.1%, though admittedly half a cent away from the $1.33 levels it was tickling on Monday morning, while against the euro sterling has climbed 0.3%.”


Inflation expected to rise to a five-and-a-half-year high

Some have taken Bank of England policymakers’ sudden hawkish turn on interest rates with suspicion but today’s inflation figures are expected to bolster the consensus view that the Monetary Policy Committee will pull the trigger on interest rates next month.

The headline CPI figure is expected to rise to its highest level in five-and-a-half years and make an increase in the central bank’s base rate almost a done deal.

With no inflation report being released in conjunction with the headline CPI figure, there will be no press conference following the release but Mark Carney will be appearing in front of the Treasury Select Committee later today, who I’m sure won’t skirt around the issue.

Today will also be the best opportunity yet to size up the newest members of the MPC,  Silvana Tenreyro and Sir David Ramsden, who will be appearing alongside Mr Carney.


Agenda: Inflation figures dominate markets’ focus; Merlin plunges 20pc on flat revenue growth

It could be a rollercoaster day for Merlin Entertainment shares

UK inflation figures steal the limelight this morning with the headline CPI reading expected to nudge up to 3pc and confirm that the squeeze on UK households has become a little tighter.

If inflation pushes any higher, Bank of England governor Mark Carney will be put in the embarrassing predicament of having to write a letter to chancellor Philip Hammond explaining why the headline reading has strayed so far from the central bank’s 2pc target rate.

Combined with tomorrow’s wage growth reading, today’s figure is expected to crank up the pressure on the BoE’s Monetary Policy Committee to reverse last year’s emergency interest rate cut and push up the base rate to 0.5pc in November’s meeting.

Ahead of the figures, the pound is having a mixed morning on the currency markets, dipping 0.2pc to $1.3265 against the dollar and nudging up 0.2pc to €1.1271 against the euro.

On the retreating FTSE 100, theme park operator Merlin Entertainments has nosedived 20pc after enduring a “difficult” summer of trading. The Thorpe Park owner blamed terrorism and bad weather and admitted that revenue growth for 2017 is now expected to be “approximately flat”.

At the other end, publisher Pearson, which has suffered from a string of profit warnings of late, has popped 7pc after reporting that full-year operating profit will be in the upper end of estimates.

Interim results: B.P. Marsh & Partners

Full-year results: Utilitywise, Bioventix, Orchard Funding, Bellway, ASOS, DotDigital Group, Genedrive

Trading statement: SEGRO,, Merlin Entertainments, Pearson, Mediclinic International, Virgin Money, Evraz, BHP Billiton

AGM: Frontier Developments

Economics: PPI m/m (UK), RPI y/y (UK), CPI y/y (UK), HPI y/y (UK), Import Prices m/m (US) Industrial Production m/m (US), NAHB Housing Market Index (US), ZEW Economic Sentiment (EU), Final CPI y/y (EU)