Connect with us

Business

Boris Johnson says shortages are result of ‘giant waking up’ of economy

economy

Boris Johnson says shortages are result of ‘giant waking up’ of economy

Boris Johnson has insisted there is no crisis in supply chains but admitted just 127 visas for tanker drivers had been granted.

Asked by BBC Radio 4’s Today programme if he believed there was a crisis in the economy, the prime minister said “no” and said difficulties were linked to the revival of the economy, calling it “a giant waking up”.

Johnson said the government had asked the road haulage industry to provide the names of foreign drivers who would want to come to the UK, and only 127 had been produced so far.

“What that shows is the global shortage,” he said.

The prime minister said a difficult winter of the petrol crisis, shortages on supermarket shelves and soaring energy bills were symptoms of the economic path the country was on that would tackle a long-term lack of productivity, low wages and under-investment in energy and infrastructure.

“This government is doing the difficult, long-term things. We got Brexit done, which was a very difficult thing to do, and we are now going to address the big underlying issues that face the UK economy,” he said.

Part of the problem was that businesses had been able to “mainline low-wage, low-cost immigration for a very long time,” Johnson said. ““I think actually this country’s natural ability to sort out its logistics and supply chains is very strong. But what we won’t do is pull the lever marked ‘uncontrolled immigration’.”

The prime minister doubled down on his insistence that disruption would be temporary but said it was part of the transition to offering more people better pay and conditions, saying drivers often had to “urinate in bushes” because the workforce was not valued by the industry.

“What you can’t do is go back to the old, failed model where you mainline low-wage, low-skilled labour – very often very hard-working, brave, wonderful people – who come in, working in conditions that frankly are pretty tough, and we shouldn’t be going back to that,” he told BBC Breakfast.

In broadcast interviews, Johnson defended the cut in universal credit, linking it to his drive to increase pay. “What we won’t do is take more money in tax to subsidise low pay through the welfare system,” he told LBC.

Johnson also criticised workers who had not returned to their offices, saying there were Downing Street staff still working from home.

He said young people who wanted to learn “can’t just do it on Zoom” and said they would be “gossiped about and lose out” if they worked from home. He said the cabinet secretary, Simon Case, had written to No 10 staff telling them to “get back to their desks”.

On Tuesday, the Conservative party conference will hear speeches by the justice secretary, Dominic Raab, and the home secretary, Priti Patel, who will announce tougher rules on community service and tagging criminals.

Johnson said he did not believe making misogyny a hate crime would be the right response to the murder of Sarah Everard. He said people’s main anger was about how existing laws were so poorly enforced.

“To be perfectly honest, if you widen the scope of what you ask the police to do, you will just increase the problem,” he said. “What you need to do is get the police to focus on the very real crimes, the very real feeling of injustice and betrayal that many people feel.”

Johnson said recruiting more female officers would help change the culture in police forces, after multiple stories about misogyny among officers that emerged in the wake of the sentencing of Everard’s murderer, Wayne Couzens, who was a serving police officer.

“In the Met now you are now running at 40%. That is a good thing. I want to see those officers progress up the ranks and attain senior positions and change the culture,” he said.

Continue Reading
Click to comment

Leave a Reply

Your email address will not be published.

12 − 12 =

Business

UK’s Truss defends economic plan that sent pound tumbling

UK’s Truss defends economic plan that sent pound tumbling

British Prime Minister Liz Truss on Thursday defended her economic plan and shrugged off the negative reaction from financial markets, saying she’s willing to make “difficult decisions” to get the economy growing.

In her first public comments since the government’s announcement of billions in uncosted tax cuts roiled markets and drove the pound to record lows, Truss said Britain was facing “very, very difficult economic times.” But she said the problems were global and spurred by Russia’s invasion of Ukraine.

She spoke after the Bank of England took emergency action Wednesday to stabilize U.K. financial markets and head off a crisis in the broader economy after the government spooked investors with a program of unfunded tax cuts, sending the pound tumbling and the cost of government debt soaring.

Truss told BBC local radio that “we had to take urgent action to get our economy growing, get Britain moving and also deal with inflation.”

“Of course lots of measures we have announced won’t happen overnight. We won’t see growth come through overnight,” she said. “What is important is that we are putting this country on a better trajectory for the long term.”

In a series of interviews, Truss said her government’s decision to cap energy bills for households and businesses would help tame inflation and help millions of people facing a cost of living crisis.

But it was not that decision that alarmed the markets. It was the government’s announcement on Friday of an economic stimulus program that included 45 billion pounds ($48 billion) of tax cuts and no spending reductions — without an independent economic assessment of the cost and impact.

The Bank of England warned that crumbling confidence in the economy posed a “material risk to U.K. financial stability,” and said it would buy long-term government bonds over the next two weeks to combat a recent slide in British financial assets.

The bank’s former governor, Mark Carney said that the government and the central bank appeared to be pulling in different directions.

“Unfortunately having a partial budget, in these circumstances — tough global economy, tough financial market position, working at cross-purposes with the Bank — has led to quite dramatic moves in financial markets,” he told the BBC.

The pound traded at around $1.08 on Thursday, above its record low of $1.0373 on Monday. It has lost some 4% of its value since Friday.

Continue Reading

Business

Stimulus Packages Provided During Pandemic Triggered Inflation- CBN

The Central Bank of Nigeria (CBN) has attributed the rising inflationary rates to the stimulus packages provided to citizens during and after the pandemic.

It added that although this increased spending, it also created global supply challenges.

CBN’s director, Monetary Policy Department, Hassan Mahmoud, said this on Wednesday at a post-MPC briefing tagged: “Unveiling Facts behind the Figures’’.

The Monetary Policy Committee had on Tuesday, unanimously voted to increase interest rate to 15.5 per cent.

“A lot of households and small businesses were injected with stimuluses; the U.S did two trillion dollars, Nigeria did about five trillion Naira, these increased the ability of people to spend.

“But the supply side could not meet up with the demand because that volume of injection was far more than the regular intake for those economies, this made prices go up,’’ he said.

Mahmoud also blamed the Russian-Ukraine war, as well as the resurgence of COVID-19 in China for the rise in global inflationary trend.

“That region accounts for more than 50 per cent of global commodity supply and 38 per cent of global oil and gas supply. The war resulted in some shortages which made prices go up.

“Then the COVID-19 lockdown in China. The country is the largest importer of commodities across the globe,’’ he added.

Continue Reading

Business

China’s yuan slides to 14-year low against US dollar

China’s yuan slides to 14-year low against US dollar

China’s yuan fell to a 14-year low against the dollar Wednesday despite US central bank efforts to stem the slide after U.S. interest rate hikes prompted traders to convert money into dollars in search of higher returns.

A weaker yuan helps Chinese exporters by making their goods cheaper abroad, but it encourages capital to flow out of the economy. That raises costs for Chinese borrowers and sets back the ruling Communist Party’s efforts to boost weak economic growth.

The yuan fell to 7.2301 to the dollar, its lowest level since January 2008. One yuan was worth about 13.8 cents, down 15% from its March high.

The yuan has exceeded expectations it might fall to 7 to the dollar after the Federal Reserve started aggressive rate hikes to cool inflation that is at a four-decade high. The Fed has raised rates five times this year and says more increases are likely.

By contrast, the People’s Bank of China has cut interest rates to boost growth that fell to 2.2% over a year earlier in the first six months of 2022 — less than half the official 5.5% target.

The yuan is allowed to fluctuate up or down 2% from its starting price each day in tightly controlled trading. That prevents big daily swings, but down days can add up to a big change over time.

To shore up the exchange rate, Beijing cut the amount of foreign currency deposits Chinese banks are required to hold as reserves to 6% from 8% as of Sept. 15. That increases the amount of dollars and other foreign currency available to buy yuan, which should push up the exchange rate.

Still, that reserve cut is unlikely to stop a slide that is driven by “a strong U.S. dollar and the expectation of more Federal Reserve hikes,” said Iris Pang of ING in a report.

“Less aggressive rate hike talk” might help the yuan rally, but it might weaken further “if the Fed maintains its very hawkish tone” into next year, Pang wrote.

Chinese officials have previously promised to avoid “competitive devaluation” to gain an advantage in trade.

The yuan sank in 2019 during trade tension with then-President Donald Trump. That prompted suggestions Beijing was trying to reduce the impact of U.S. tariff hikes, but there was no official confirmation. The currency later strengthened.

Other governments also are struggling to manage capital flows under pressure from Fed rate hikes. On Friday, Vietnam’s central bank raised a key interest rate in what economists said appeared to be an effort to stop an outflow of money in search of higher returns.

Continue Reading
Advertisement

Trending