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Boris Johnson To Consider Using Army To Supply Petrol Stations

Petrol Stations

Boris Johnson to consider using army to supply petrol stations

Hundreds of soldiers could be scrambled to deliver fuel to petrol stations running dry across the country due to panic buying and a shortage of drivers under an emergency plan expected to be considered by Boris Johnson on Monday.

The prime minister will gather senior members of the cabinet to scrutinise “Operation Escalin” after BP admitted that a third of its petrol stations had run out of the main two grades of fuel, while the Petrol Retailers Association (PRA), which represents almost 5,500 independent outlets, said 50% to 90% of its members had reported running out. It predicted that the rest would soon follow.

The developments led to growing fears that the UK could be heading into a second “winter of discontent” and warnings that shelves could be emptier than usual in the run-up to Christmas.

In a bid to prevent the crisis from deepening further, ministers including the business secretary Kwasi Kwarteng, transport secretary Grant Shapps and home secretary Priti Patel gathered for a midday meeting on Sunday to discuss options – including Operation Escalin.

Conceived years ago during the planning for a no-deal Brexit, it would mean hundreds of soldiers being drafted in to drive a reserve fleet of 80 tankers. It is understood that it would take up to three weeks to fully implement, because some of those mobilised may already be on other deployments and others could be reservists. Escalin was touted as an option last week, but government sources downplayed the chance of its activation.

Late on Sunday night, Kwarteng also announced that fuel firms would be temporarily excluded from the Competition Act for the purposes of sharing information and optimising supply. He admitted there had been “some issues with supply chains”, but insisted there was still “plenty of fuel at refineries and terminals”. Officials said the move would make it easier for firms to “share information, so that they can more easily prioritise the delivery of fuel to the parts of the country and strategic locations that are most in need”.

The Escalin and other proposals will be put to Johnson on Monday afternoon, in a meeting where ministers are also expected to discuss more immediate solutions to try to influence people’s behaviour and put an end to the current levels of panic buying.

Ministers are exasperated because they think that the true magnitude of fuel shortages would have been tiny if the public were acting normally, and the HGV driver shortage would have only had a marginal effect, but media reports have prompted queues outside forecourts across the country. The PRA said demand at one service station had risen by 500% on Saturday compared with last week.

A source suggested that a high level of shortages will last at least another five days – and could go on even longer if people’s behaviour does not change. They called the situation a “catch-22”, because by making any interventions, the government could end up exacerbating the problem: “The more we seem to react to this, the more we end up driving it. But if we don’t react, it just carries on. We’re almost generating our own crisis.”

The shortage has also had major knock-on effects that ministers feel need urgent remedying, with teachers and doctors unable to fill up their tank to drive to school or hospital. The blunt communications strategy of insisting there is no lack of fuel is likely to be shifted to urging people to be mindful of others when buying petrol.

Attention is also turning to Christmas. Kate Martin of the Traditional Farm-fresh Turkey Association (TFTA) said the UK could face a “national shortage” of turkeys in the run-up to December.

The TFTA, which represents producers of high-end free-range turkeys, said it was “100% caused by a labour shortage” due to post-Brexit immigration rules, meaning “a whole host” of the workforce is “no longer available for us to use on a seasonal basis”.

The British Retail Consortium also said moves to relax immigration rules to fix supply chain issues was “too little, too late” for Christmas.

Andrew Opie, the group’s director of food and sustainability policy, predicted to the BBC that during the festive season, shoppers would see “less choice, less availability, possibly shorter shelf life as well, which is really disappointing because this could have been averted”.

Jim McMahon, Labour’s shadow transport secretary, claimed the government’s solution of streamlining HGV tests and granting about 5,000 extra visas for drivers and another 5,000 for poultry workers was “not good enough”. He said if ministers did not do more, “shelves will continue to be bare, with medicines not delivered and Christmas ruined for the nation”.

A Tory MP, David Morris, spelled out the scale of the challenge facing the government. He said: “I can remember the winter of discontent and I remember what was building up to it and this to me feels very, very reminiscent.”

Morris told the Guardian: “We’re not anywhere near that situation yet, but there are perfect storm analogies coming along that could put us into that territory.” He stressed it was a “historic problem” that ministers were trying to address, but admitted the pressure Covid was likely to put on the NHS this winter and the looming end of the universal credit uplift would make it a challenging winter for many.

Shapps on Sunday urged people to “be sensible” and blamed “one of the road haulage associations” for what he called a manufactured crisis, suggesting on Sky News that the group had leaked details from a meeting last week about driver shortages at fuel firms. However, the Road Haulage Association branded it a “disgraceful attack” concocted to “divert attention away” from the government’s handling of the issue.

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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.

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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.

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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.

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