onth’s ers & ers
1. China’s Economy
China’s Premier Wen Jiabao has said that the country’s economy is under pressure, although Beijing is forecasted to meet its growth target despite those issues. Wen said that by easing inflation policymakers had been given more room to introduce measures that could spur growth. The roots of China’s economic problems could be due to a decrease in global demand for its exports, as well as lacklustre growth in domestic consumption. “We have the conditions and capabilities, and will be sure to fulfil this year’s economic and social development targets,” Premier Wen was quoted as saying by the Xinhua news agency. The economic conditions in the eurozone and the US, two of China’s biggest markets, also continue to remain weak, adding to fears that China’s growth may slow further in the near term.
2. Libor Scandal
Seven British banks, including HSBC and Royal Bank of Scotland, are to be questioned for allegedly manipulating the Libor inter-bank lending rate. Other banks to receive subpoenas from the attorneys general of New York and Connecticut include Citigroup, Barclays, Deutsche Banks, JP Morgan and UBS. US regulators are calling for the hearing as they suspect potential involvement by other banks in the Barclays scandal. Last month, Barclays was fined £290m for rigging Libor, with the investigation concluding that at least one other bank must have colluded with Barclays in any attempts to manipulate Libor rates. “This is the first time we’re seeing a legal case that is trying to prove [collusion]. If they can prove it, then all the fees could amount to tens of millions of pounds,” said Ralph Silva, a banking analyst at SRN.
3. George Osborne
The Chancellor is now facing a revolt from the experts who supported the Tory’s economic strategy during the pre-election debate in 2010. Only one of the 20 economists who put their names to an influential letter in February 2010 said they continue to have faith in the Chancellor. Since the letter was published, the UK economy has become stagnant and has shrunk by 1.4pc in the past nine months. Forecasters also predict that borrowing will rise and the low growth seen so far undermines the Chancellor’s deficit reduction goal. Mr Osborne declared the letter “a decisive moment in the economic debate in Britain”.
a smile despite s woes
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