Showing posts with label spending cuts. Show all posts
Showing posts with label spending cuts. Show all posts
March 29, 2011
October 24, 2010
THE SUNDAY TELEGRAPH: Britain's spending cuts have been branded as "absolutely insane" by one of the world's leading currency traders, who expects the pound to tumble beyond the low it has set this year.
"I think what Britain is doing is absolutely insane" John Taylor, the founder of the $8bn FXConcepts fund, told The Sunday Telegraph. "The Conservatives will lose their stomach for this."
Reducing Britain's £156bn budget deficit is the cornerstone of the government's plan for restoring the economy's health. George Osborne, the Chancellor of the Exchequer, told Parliament last week that the £81bn in spending cuts would pull "Britain back from the brink."
Although Mr Osborne's plan has won support from many economists, there remains concern that it will damage a recovery that is already showing signs of faltering.
"The last retail sales numbers were pretty ugly and then we have to go through the VAT hit," said Mr Taylor, who at 67 is one of the oldest operators in the foreign-exchange markets. The pound will fall below 1.40, possibly this year, he expects. Sterling reached 1.43, its weakest against the dollar this year in May.
The Bank of England has publicly welcomed sterling's decline since the financial crisis erupted in 2008, but the central bank is not alone. Having already yanked hard on monetary and fiscal levers, an increasing number of governments are eyeing a weaker currency as a way of securing their share of an uneven global recovery. >>> Richard Blackden in New York | Sunday, October 24, 2010
Since when do currency traders understand economics? – © Mark
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September 15, 2010
THE TELEGRAPH: Meryn King, the Governor of the Bank of England, has urged the unions to accept public sector reforms and jobs cuts by warning that anything short of tackling the UK's record Budget deficit would “fail the next generation”.
Addressing the Trades Union Congress, he described the current deficit as “unsustainable” and, in an implicit defence of the Coalition's policy, argued that “the current plan ... to reduce the deficit steadily over five years [is] a more gradual fiscal tightening than in some other countries”.
“Vague promises would not have been enough,” he told the Manchester conference, where union leaders have described the Government as the “Demolition Coalition” and threatened civil disobedience in protest at the planned reforms.
“Market reaction to rising sovereign debt can turn quickly from benign to malign, as we saw in the euro area earlier this year. It is not sensible to risk a damaging rise in long-term interest rates that would make investment and the cost of mortgages more expensive,” Mr King said.
“The costs of this crisis will be with us for a generation. And we owe it to the next generation to seize this opportunity to put in place the reforms that will make another crisis much less likely and much less damaging.”
He stressed that reducing the Budget deficit, which is forecast to hit £149bn this year – the largest peacetime deficit in history and the biggest as a proportion of GDP in Europe, is one of a number of necessary reforms, and will require co-operation from the unions. >>> Philip Aldrick, Economics Editor | Wednesday, September 15, 2010
September 09, 2010
THE TELEGRAPH: Benefits claimants will have their payments cut as ministers seek a further £4 billion in welfare cuts.George Osborne, the Chancellor, said that the Government will go further than previously announced in trying to bring down the cost of Britain’s social security system.
The promise of new welfare cuts has caused strain in the Coalition, with some Liberal Democrat MPs protesting against the move.
Mr Osborne said the welfare system had grown out of control and allowed some people to make the “lifestyle choice” of claiming benefits for their entire life instead of working.
Reforms being drawn up by the Coalition will give welfare claimants “a strong incentive” to get a job.
Welfare now costs £192 billion a year, almost a third of all government spending. An estimated 5 million people of working age are now economically inactive and receiving benefits.
In the Budget in June, Mr Osborne announced that benefits cuts will save £11 billion a year by the end of the Parliament.
In a BBC interview, he signalled that ministers will now seek deeper cuts, reducing welfare spending by another £4 billion. >>> James Kirkup and Andrew Porter | Thursday, September 09, 2010
June 25, 2010
THE TIMES: David Cameron will risk a trans-Atlantic rift over his Budget today by insisting that Britain is right to slash spending despite American warnings that deep cuts could derail the global recovery.
Tim Geithner, President Obama’s Treasury Secretary, said it was paramount for European leaders to concentrate on growth, and that they could not rely on America to drive the recovery.
His comments reflect concern in Washington that European governments - Germany in particular - have cut their budgets too hard and too fast, and that the risk to growth could drag the world economy back towards recession.
Mr Cameron, who holds face-to-face talks with Mr Obama tomorrow in Toronto, will insist that he had no choice because the Greek crisis showed the dangers to governments of failing to deal with vast debts.
“For countries with big fiscal deficits, that path to recovery requires us to deal decisively with the deficit problem,” said the Prime Minister’s official spokesman.
“It is perfectly consistent to have strong position on fiscal consolidation and be pro growth.” Read on and comment >>> Roland Watson, Toronto | Friday, June 25, 2010
June 20, 2010
THE SUNDAY TIMES: The country threatens Europe with a new debt crisis as its once vibrant economy falters, inflicting a painful human toll
Each day Joaquim Vizcaino, a 26-year-old Madrid University graduate, goes on the internet to look for a job. In the past six months he has had only one day’s work, as a driver, and he is getting desperate.
His girlfriend Letizia pays the £600-a-month rent on their two-room flat in the sprawling suburbs of Madrid and has supported him since he lost a job in marketing. Now she is beginning to lose patience.
“She keeps on telling me to go out and get a job,” he said with a grin as he drove her car to a doctor’s surgery on Friday for blood tests to find out why he has been losing weight. It might be stress: “I can’t even get a job as a waiter.”
Spain’s 20% unemployment — it is double that among the 16 to 25-year-olds — is surpassed in Europe only by Lithuania’s and is inflicting a painful human toll on what was once called the “Iberian tiger”, one of the most vibrant and dynamic countries of the European Union.
“For many years we lived extremely well,” said Ramon Tamames, a distinguished professor of economics at Madrid University, referring to a decade of extraordinary growth fuelled by low-cost loans from Europe.
“They were some of the best years in Spain’s history,” he added. “Now the party is over.” Read on and comment >>> Matthew Campbell | Sunday, June 20, 2010
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May 24, 2010
THE TELEGRAPH: It's a new nation under the coaltion government – but be warned: the newly poor will need a voice, says Mary Riddell.
Tomorrow, with all due pomp and pageantry, the Queen will tell Parliament that her Government will exercise "freedom, fairness and responsibility". Her speech, rooted in 500 years of tradition, will herald the birth of a modern nation.
The legislative programme outlined by Her Majesty is the gateway to a Britain in which children play in streets uncluttered by CCTV cameras and superfluous immigrants. These pupils, heading to sumptuous schools set up by (non-working?) parents, may walk past JobCentre Plus branches packed with benefit scroungers being shoehorned into gainful employment. Any anti-social elements disturbing the civic calm will be swiftly dealt with by our newly-politicised police. What happy days.
I do not mean to parody the Con-Lib agenda. Scrapping ID cards, curbing the excesses of the surveillance state and electoral reform are welcome and overdue. Even so, the upbeat pitch of today's proceedings stands in stark contrast to yesterday's.
The £6.25 billion cuts outlined by George Osborne sounded modest and, in some cases, positive. We can all sign up to a bit of quangocide and an end to first-class travel by civil servants. But these are the surface grazes before tax cuts kick in and the axe falls on the 300,000 public sector jobs threatened by efforts to cut the £157 billion budget deficit.
As the age of austerity dawns, the government is unfurling two contradictory visions of Britain. One is of a settled country reclaiming equality and freedom. The other shows a future so divisive that its strictures may rupture our tacit social contract and threaten civic peace. Obviously, cuts are essential, and Labour profligacy has made them more so. But the Coalition, still in its honeymoon, is being allowed to draw a veil over the pain to come. >>> Mary Riddell | Monday, May 24, 2010
May 14, 2010
THE TELEGRAPH: The National Health Service will not be spared the efficiency savings which the Government will impose on the entire public sector, Andrew Lansley, the Health Secretary, has warned.
Overall spending on the NHS will rise in real terms, he said, but the “substantial increase” in health spending over the past decade under Labour was “not sustainable for the future”.
The Government would have to go beyond the annual efficiency savings for the NHS set out by Labour, Mr Lansley said. Labour said its plans had implied savings of up to £20 billion by 2013-14 and warned that the coalition’s plans to do more would mean “real pain for the NHS”. >>> Rosa Prince and James Kirkup | Friday, May 14, 2010
May 12, 2010
THE TELEGRAPH: Spain will slash public spending by €6bn and cut civil servants' by 5pc salaries [sic] this year as part of a plan to ease fears the country could slide into a debt crisis like that of Greece.
Jose Luis Rodriguez Zapatero, the prime minister, on Wednesday outlined a series of measures that will include a suspension in automatic increases to retirement pensions, a drop in overseas aid and a reduction in government investment.
He said 13,000 civil service jobs would be cut in 2010, with public sector wages frozen in 2011.
Mr Zapatero was fleshing out the details of a €15bn plan announced on Sunday for deeper spending cuts to reduce Spain's deficit from 11.2pc of GDP last year to 9.3pc in 2010, and eventually to 3pc in 2013. >>> | Wednesday, May 12, 2010
September 14, 2009
MAIL ONLINE: Lord Mandelson will today face down union threats of strikes and rioting if there are public spending cuts.
In the most hawkish statement yet from a senior minister on the need for restraint he will say Gordon Brown has decided to stop 'throwing money' at state services.
The Business Secretary, in a major speech, will also insist that the Tories are 'ideologues', hellbent on wrecking the public services.
His intervention comes as union barons raised the spectre of 1980s-style riots if public spending is slashed.
TUC general secretary Brendan Barber said taking an axe to public services would spark a 'double quick, double dip' recession and push unemployment over four million.
Unemployment could hit 40 per cent in major cities in the North, triggering massive social unrest, he said.
Speaking on the eve of the TUC conference in Liverpool, Mr Barber said: 'Cut the stimulus off and the economy would go into decline again.
'It would take many years before there was any chance of returning to anything like full employment. That would scar for life a whole generation of young people.'
He warned: 'Last time we suffered slash and burn economics we had riots in the streets here.
'I make no prediction that this would happen again, but it would take us back to the days of a deep north-south divide and once again hollow out whole areas of the economy.' >>> Tim Shipman and Kirsty Walker | Monday, September 14, 2009
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