From the British prime minister’s official Twitter feed on Tuesday…
Inflation is running at 0% – the lowest on record. It's good news for family budgets and a sign our long term plan is working.
— David Cameron (@David_Cameron) March 24, 2015
Andrew Dilnot CBE, chair of the UK statistics authority, writes to David Cameron…
David Cameron has insisted that RBS chief executive Stephen Hester should receive a bonus of no more than £1m this year – half of last year’s award – as the UK prime minister attempts to tighten his clamp down on executive pay, says the FT. Stephen Hester’s pay, an annual lightning rod for public and political criticism after the bank received a £45bn state bail-out during the crisis, has become a crucial litmus test for the government’s appetite for a public showdown over pay in recent weeks. The newspaper cites unnamed officials as saying a tough message will be delivered to RBS’ remuneration committee on Wednesday by the UKFI, which holds the taxpayers’ stake in RBS.
David Cameron has left open the door to Britain giving billions of pounds of new support to the IMF – and indirectly to ailing members of the eurozone – in a move likely to infuriate eurosceptic MPs in his own Conservative party, reports the FT. The prime minister’s move would be welcomed by France and Germany but would be subject to a fraught parliamentary vote in the UK. Britain is already under pressure from eurozone countries to increase its IMF commitments by about €30bn as part of a European package of new resources. Mr Cameron’s team stress that no decision has been taken to increase Britain’s contributions beyond the £10bn approved by MPs in that vote last July, but the newspaper cites unnamed insiders saying that the situation could change if Japan and other big economies such as China and Brazil agreed to increase their support for the IMF’s eurozone assistance.
Measures to tackle “grossly excessive top pay awards” and a new clampdown on tax avoidance are to be set out by ministers in the coming weeks, the FT says, amid fears that the behaviour of the rich is undermining public support for the government’s austerity programme. David Cameron returns to Downing St after the New Year break on Wednesday vowing to enforce responsibility in the boardroom and the City, as he attempts to show that the coalition is serious about spreading the economic pain in 2012 across society. Ministers are not thought to be planning the imminent introduction of new wealth taxes – such as the Lib Dems’ long-cherished mansion tax – but senior coalition figures say that any prospect of scrapping the 50p top rate of tax in the next few years was “for the birds”. George Osborne, chancellor, will use his Budget to curb evasion and avoidance of taxes on very high value properties.
François Baroin, French finance minister, on Friday added to the growing war of words between his country and Britain when he described the UK’s economic situation as “very preoccupying”, the FT reports. “At the moment, one prefers to be French than British on the economic front,” he said in an interview with Europe 1 radio. The comments come a day after Christian Noyer, head of the Bank of France, triggered a Franco-British spat when he said that a French downgrade would not be justified on economic fundamentals. On that basis, he said: “They should begin by downgrading the United Kingdom which has bigger deficits, more debt, higher inflation, less growth than us and where credit is shrinking.” His comments were angrily dismissed by British officials. “The markets clearly don’t agree with Noyer,” said a UK Treasury official.
David Cameron has dashed hopes in the eurozone that Britain could commit at least €30bn in extra resources to the International Monetary Fund to help countries stricken by the financial crisis, including those in the eurozone, says the FT. Downing Street said it did not expect Britain to commit more than an additional £10bn to the IMF and that extra support from the international community should not be a substitute for the eurozone sorting out its own fiscal crisis. The newspaper reports unnamed officials at the Brussels talks say the €200bn figure was intended to reassure the markets but had no substance behind it.
David Cameron on Monday defended his use of the British veto at last week’s European Union summit as in the “national interest”, but the strains placed on his coalition government were laid bare when his deputy, Nick Clegg, refused to sit alongside him in the House of Commons, the FT reports. Mr Clegg, leader of the pro-European Liberal Democrats, claims the veto was bad for British business and would leave the UK isolated. But the prime minister was cheered by Tory MPs who claimed he had shown “bulldog spirit”. Mr Cameron’s refusal to agree an EU treaty change to reinforce eurozone fiscal discipline in the absence of safeguards for the City of London continues to cause anger across Europe. That could be further inflamed by Britain’s refusal to take part in an urgent €200bn funding boost for the International Monetary Fund to tackle the crisis. The Wall Street Journal reports that the financial services industry is all concerned that the EU will pursue new regulations requiring certain types of business to be transacted within the euro zone, cutting London out of the equation.
David Cameron on Monday defended his use of the British veto at last week’s EU summit as in the “national interest”, but the strains placed on his coalition government were laid bare when his deputy, Nick Clegg, refused to sit alongside him in the House of Commons, the FT reports. Mr Cameron’s refusal to agree an EU treaty change to reinforce eurozone fiscal discipline in the absence of safeguards for the City of London continues to cause anger across Europe. That could be further inflamed by Britain’s refusal to take part in an urgent €200bn funding boost for the IMF to tackle the crisis. The WSJ meanwhile says there is concern in the City that a loss of goodwill with Brussels could weaken the UK’s negotiating position on regulations, and there are fears a revamped financial tax transactions proposal that would use a loophole to bypass a UK veto.
Policy changes the ECB announced last week will help banks directly and governments indirectly. But the EU fell short on every element of a comprehensive deal. On Friday, investors reacted positively to what was sold to them as a “fiscal compact”. But once the implications of a separate treaty are understood, I fear disillusionment will set in. — Wolfgang Münchau.
And sure enough, that’s precisely what’s happening. Analysts, strategists, and commentators across Europe are asking: ‘Where is the fiscal union?’ Read more
Nick Clegg has warned David Cameron to show no signs of triumphalism when the prime minister reports back to MPs on Monday on his decision to veto an EU treaty change, the FT reports, as the row escalated into the most serious threat yet to the stability of the coalition. Mr Cameron will defend his decision as right for Britain and being in the interests of the City and is expected to receive a hero’s welcome from Conservative MPs in the Commons. But Mr Clegg warned on Sunday that the rift in Brussels could leave Britain “isolated and marginalised”. Faced with a furious backlash from Liberal Democrat ministers and grandees, Mr Clegg attempted to distance himself from the use of the veto and has urged Mr Cameron to use his Commons statement to start rebuilding bridges in Europe. Meanwhile Germany continued to dampen speculation of increased bond-buying by the ECB, with Bundesbank president Jens Weidmann telling Frankfurther Allgemaine that the onus was on governments to resolve the crisis with financial backing, and “financing of sovereign debt through central banks is and remains forbidden by treaty,” reports Bloomberg. The Obama administration was disappointed by the lack of progress in bolstering the European bailout fund, says the WSJ, and US officials want the continent to increase its firepower by as much as $2tn to dissuade investors from betting against the countries’ debt and driving up their borrowing costs.
David Cameron’s attempts to assert his authority over his party backfired on Monday, writes the FT, when more than 80 Conservative backbenchers defied their leader over membership of the European Union in a devastating blow to the prime minister. More than a quarter of Mr Cameron’s backbenchers voted for a motion calling for a referendum on whether the UK should remain in the European Union despite heavy lobbying from the prime minister, who set up camp in the Commons on Monday in an effort to win over recalcitrant MPs. The government, which imposed a three-line whip, defeated the motion comfortably with a majority of 372. But the scale of the Tory revolt shook the leadership as a huge chunk of the backbench ignored the wishes of their leader, with 81 Tories voting for the referendum and a further 15 abstaining. Earlier in the Commons, Mr Cameron told his backbenchers that now was not the right time to discuss pulling out of Europe. He also hinted that he could repatriate powers from Brussels in the event of any European Union treaty change.
David Cameron became embroiled in a furious row at the weekend with Nicolas Sarkozy over Britain’s role in talks to solve the crisis enveloping the euro, the Guardian reports, with Mr Sarkozy telling the British leader, “you have lost a good opportunity to shut up”. Citing unnamed officials who witnessed the angry exchanges between the two leaders, the report says Mr Cameron insisted that the package to be adopted on Wednesday by the 17 eurozone countries had serious implications for non-euro countries in the EU and their interests must be safeguarded. Eventually Mr Sarkozy secured an agreement that all 27 leaders will first debate the three-pronged package of measures to recapitalise banks, build up the bailout find and write down Greek debt, but then the eurosummit would have the final say at back-to-back summits on Wednesday. The pre-summit meeting of 27 EU leaders is “more than a briefing, but less than a negotiation” according to one official, says the FT Brussels Blog. However Mr Cameron, who this week will face intense hostility from within his own party on EU membership, secured a mention in the summit communique that a level playing field for non-euro countries must be upheld.
David Cameron has urged European leaders to take a “big bazooka” approach to resolving the eurozone crisis, warning they have just a matter of weeks to avert economic disaster. The UK prime minister told the FT he wants France and Germany to bury their differences and to adopt before the end of the year what he claims would be a decisive five-point plan to end the uncertainty, which was having a “chilling effect” on the world economy. Separately, Mr Cameron wants Germany and others to accept the “collective responsibility” of euro membership and to increase the firepower of the eurozone’s €440bn bailout fund to stop financial contagion spreading from Greece. Although he refused to speculate on a Greek default – some British government ministers believe it is now inevitable – he said all uncertainty had to be removed about the country’s economic future. He also called for the IMF to be more active in “holding feet to the fire”, confronting eurozone leaders in the starkest terms possible with the consequences of further prevarication. The final part of Mr Cameron’s plan is to address Europe’s underlying weaknesses, including deepening the single market and improving the governance of the eurozone, if necessary through treaty change. “That’s the menu,” he said. “It’s not à la carte – you have to do the whole thing.”
David Cameron has given the strongest signal yet that he will back recommendations to build a firewall around Britain’s retail banking operations, the FT says, but he wants to delay the implementation of the structural upheaval for a number of years. The prime minister’s allies say he is anxious about the impact of radical and costly reform on the banking sector at a time of flat growth and is opposed to anything that would undermine business lending and impede the recovery. But colleagues say Mr Cameron is prepared to back the changes – to be outlined on Monday in Sir John Vickers’ long-awaited report on banking reform – if the split between retail and riskier investment banking is phased in after the planned 2015 election.
David Cameron is set to face a gruelling Commons interrogation on Wednesday over new revelations about his links to Rupert Murdoch’s media empire and claims that he turned a blind eye to the phone-hacking affair, the FT reports. The prime minister cut short a trip to Africa on Tuesday to give a Commons statement and lead an emergency debate on the scandal, with Labour claiming he repeatedly ignored warnings about phone hacking and its implications for Andy Coulson, his former press chief and ex-editor of the News of the World. Meanwhile, it emerged that Neil Wallis, former deputy editor of the News of the World, provided unpaid advice to Mr Coulson before the 2010 election, in addition to his £1,000-a-day part-time PR contract with the Metropolitan Police. One Tory official said Mr Wallis – arrested last week over hacking allegations – had “probably” also visited Downing Street. It was unclear precisely what services the man known as “the Wolfman” provided for Mr Coulson and, indirectly, for Mr Cameron.
It’s safe to say we didn’t take this entirely seriously when it landed in the FT Alphaville inbox a couple of weeks ago.
GBP: The Closure of The News Of The World could be the start of a deeper and more lengthy commentary on Politics and the Press in the UK. The Cameron Government is well entrenched with the Media, and we would be surprised if we do not hear of Higher Level Goverment employees resigning in the next few weeks as the Government ‘Inquiry’ digs deeper. Though we are negative the USD, for the time being we are not negative the USD against the GBP. It is sitting on support at 1.5940, with the 50 DMA about to Cross the 100 DMA. The Possibility of Government Corruption and the eventual Clarity is never positive for a Currency — Douglas Borthwick, MD of Faros Trading.
David Cameron, prime minister, insisted on Thursday that it would be “quite wrong” for Britain to give any further financial help to Greece, in spite of pressure from other European capitals, reports the FT. Donald Tusk, Poland’s prime minister, said ahead of a European Union summit that non-euro countries – including Britain – should help in a further Greek bail-out, while Germany also has concerns about Mr Cameron’s position. German law stipulates that if Berlin joins a new eurozone bail-out of Greece, the operation should also include the use of an EU-wide stability fund administered by the European Commission. Mr Cameron has made it clear that he would resist such a move – which could leave Britain on the hook for about €1bn (£890m) – and insisted that any British help for Greece should only be through the International Monetary Fund.
David Cameron is being urged by some of the new generation of Tory MPs to stop taking a “backseat” role in the eurozone debt crisis, amid growing criticism of his reluctance to engage in an issue with profound implications for the British economy, the FT reports. As Mr Cameron heads to Brussels today for a European Union summit, 14 members of the 2010 intake of Conservative MPs have written to the Financial Times, urging him to start shaping the debate. Their concern about his hands-off approach is shared by Ed Balls, the shadow chancellor, who said on Tuesday: “We have a chancellor and prime minister on the sidelines, irrelevant and ignored in these debates.” Mr Cameron and George Osborne, the chancellor, have so far been happy to leave it to eurozone members to try to resolve the Greek debt crisis, insisting that Britain’s only role in any new bail-out would be through the International Monetary Fund.
The US and UK are warning that Nato will increase airstrikes against Libya to levels not yet seen during the two month old conflict, as the pageantry of President Barack Obama’s state visit to the UK turns to issues of life and death, the FT reports. Speaking on a day when Nato aircraft carried out their most intensive attacks on Libyan targets to date, Ben Rhodes, Mr Obama’s deputy national security adviser, said Mr Obama and David Cameron, the UK prime minister, would make clear at a meeting at 10 Downing Street on Wednesday that the alliance would increase pressure on Col Gaddafi still further.
David Cameron scotched Gordon Brown ’s chances of becoming the next managing director of the International Monetary Fund on Tuesday as he indicated that his predecessor was not up to the job, writes the FT. Although there is not yet a vacancy for the post, Dominique Strauss-Kahn, the fund’s head, would need to resign in the summer if he wanted to try to become the Socialist candidate for president of France. Mr Strauss-Kahn is widely thought to have been an excellent head of the fund, bringing the organisation back from obscurity, challenging national leaders to find a solution to the financial and economic crisis and leading the international efforts last week to address the crisis and set the world on a path towards sustainable and balanced growth. His possible departure was the talk of the IMF spring meetings in Washington last week but outside British circles, Mr Brown was not generally listed among possible candidates. Instead, the debate was whether a European candidate would again secure the post or if it would go for the first time to a candidate from an emerging market economy.
The “clock is ticking” on Libya and the time to shape events to counter Muammer Gaddafi’s regime is running out, David Cameron has said as he stepped up calls for urgent action on imposing a no-fly zone, reports the FT. Making one of his most impassioned arguments in favour of intervening on the side of the Libyan uprising, the prime minister suggested that the “consequences of inaction are worse” than any dangers posed by offering limited military support. But a diplomatic consensus has not yet been reached. Meanwhile, in Libya, Gaddafi’s forces were approaching the opposition stronghold of Benghazi as rebel-held territory shrunk, reports Reuters.
UK prime minister David Cameron and China’s vice-premier Li Keqiang on Monday agreed trade deals worth £2.6bn, in what Downing Street described as an “important step change” in their trade relationship, reports the FT. Among the 15 separate deals, which will help the government meet its goal of doubling annual trade in goods and services with Beijing by 2015, were an agreement to increase sales of Jaguar Land Rover vehicles to China; an oil exploration agreement between BP and oil giant Cnooc, and a framework deal between PetroChina and private UK company Ineos on refining joint ventures.