Britain's Prime Minister Theresa May
Britain's opposition Labour Party challenged Prime Minister Theresa May's government on Thursday to deliver immediately on its promise that nearly a decade of public spending cuts is coming to an end.
Finance minister Philip Hammond will announce his annual budget next week, armed with better than expected public finances but needing to balance any largesse with caution over the huge uncertainty posed by Brexit.
Labour's finance policy chief John McDonnell said Hammond must also flesh out a promise May has made to bring an end to austerity after eight years of public spending cuts designed to shrink Britain's budget deficit.
"This budget will show us whether she is true to her word or not," McDonnell said. "We need decisive action to end and reverse austerity, not some vague promises for the future and a few financial conjuring tricks."
German business morale deteriorated slightly more than expected in October as trade tensions, the possibility of Britain leaving the European Union without a deal, and concerns about Italy’s finances dampened confidence.The Munich-based Ifo economic institute said on Thursday its business climate index fell for the second month in a row to 102.8. That was lower than a Reuters consensus forecast of 103.0.“Firms were less satisfied with their current business situation and less optimistic about the months ahead,” said Ifo chief Clemens Fuest. “Growing global uncertainty is increasingly taking its toll on the German economy.”Consumption and state spending have been the main drivers for growth in Germany as exports weaken. The dynamic domestic economy is expected to continue propelling an upswing seen entering its 10th year in 2019.But the risk of a no-deal Brexit, trade tensions and a lack of skilled workers are weighing on the growth outlook for Europe’s largest economy.“The picture of the economy has become clearer,” said Thomas Gitzel of VP Bank Group. “The German economy is sliding into a weak phase. Trade disputes, tough Brexit negotiations and concerns about Italy’s state finances are unnerving companies.”The government said earlier this month it expected growth to be slower in the third quarter, citing bottlenecks in the car sector stemming from the introduction of new pollution standards known as WLTP as a factor.The government has also lowered its economic growth forecast for this year to 1.8 percent from 2.3 percent previously. It expects Europe’s biggest economy to expand at the same pace in both 2019 and 2020. The economy grew 2.2 percent last year.
Brexit, Italy, and trade tensions weigh on German economy
Responding to McDonnell's speech, Treasury minister Liz Truss defended her party's track record on the economy and said the government was working to grow the economy so more money was available for public services.
May told her party's annual conference this month that "a decade after the financial crash, people need to know that the austerity it led to is over and that their hard work has paid off."
Britain's budget deficit has been cut from nearly 10 percent of gross domestic product in 2009/10 to under 2 percent in the last financial year.
European Council President Donald Tusk told the European Parliament on Wednesday that he would be ready to call a special summit on Brexit whenever negotiators said "decisive progress" had been made toward a deal.Briefing lawmakers on last week's regular summit, Tusk recalled that EU leaders had agreed that they would meet again to endorse a deal if their negotiator Michel Barnier judged that enough progress toward a deal had been made. A meeting pencilled in for Nov. 17-18 is still on hold."I stand ready to convene a European Council, if and when the Union negotiator reports that decisive progress has been made," Tusk said. "The Brexit talks continue with the aim of reaching a deal," he added, saying no one wanted talks to fail.He repeated that he believed leaders would extend Britain's status-quo transition period after Brexit in March if London asked for that -- an issue May raised at the summit."It was made clear by the UK that more time is needed to find a precise solution," Tusk said. "Therefore, there is no other way but to continue the talks. Leaders expressed their full trust and support for Michel Barnier." UK PM May's Brexit transition plan could last for years
EU ready to call Brexit summit when conditions met
McDonnell's speech was accompanied by a dossier outlining Labour research into the extent and impact of spending cuts on areas such as health, education and local services. It said 30 billion pounds of new funding was needed to stop planned cuts, and nearly 80 billion to reverse cuts since 2010.
"What we've done in the dossier is to try and get Theresa May and Philip Hammond to focus on the impact of austerity," he said. "We will seek to ensure not just that we end austerity, but actually reverse much of what's been done."
UK Prime Minister Theresa May's Brexit plan could leave Britain in a "long running" multiyear transition period, the London Times reported on Wednesday citing leaked documents seen by the newspaper.According to the leaked documents, the plan "could in theory, lead to a long running IP (implementation period)" and the arrangement could last for many years on a "rolling" basis with an "annual decision point" where any transition extension is reviewed, the Times reported http://bit.ly/2EJ625L.The documents were drawn up by May's principal Europe adviser, Oliver Robbins, on instructions from May's office, according to the report.Northern Irish DUP to back rebel Brexit amendmentThe documents reveal that cabinet ministers have been presented with different models to work out what would happen if a trade deal to govern UK's future relationship with the EU was not reached by the end of the transition period, the Times said.With just over five months until Britain is scheduled to leave the EU, Brexit talks have stalled over a disagreement on the so-called Northern Irish "backstop", an insurance policy to ensure there will be no return to a hard border on the island of Ireland if a future trading relationship is not agreed in time.May again failed to clinch a deal at an EU summit last week and her decision to signal the possibility of extending a post-Brexit transition period, keeping Britain under EU governance with no say in it, to help end the deadlock, has angered both hardline supporters of Brexit and pro-EU lawmakers. Ireland says Brexit transition extension can't be alternative to Irish backstop
UK PM May's Brexit transition plan could last for years