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Macron steps back from midnight threat against UK exports in fishing row

Macron

Macron steps back from midnight threat against UK exports in fishing row

France’s president, Emmanuel Macron, has shelved his threat to clog up UK exports and ban its fishers from landing catches at French ports from midnight in a dispute over access to British fishing waters, as his deadline approached.

Discussions resumed after a proposal was put forward by Macron’s government late on Monday. Downing Street had previously said it was bracing for Paris to deliver on its vow to retaliate over the issue of fishing permits.

“Since this afternoon, discussions have resumed on the basis of a proposal I made to prime minister [Boris] Johnson. The talks need to continue,” Macron told reporters on the sidelines of the Cop26 climate conference in Glasgow. “We’ll see where we are tomorrow at the end of the day, to see if things have really changed.”

A UK government spokesperson said: “We welcome the French government’s announcement that they will not go ahead with implementing their proposed measures as planned tomorrow. As we have said consistently, we are ready to continue intensive discussions on fisheries … We welcome France’s acknowledgement that in-depth discussions are needed to resolve the range of difficulties in the UK-EU relationship.”

France had been expected to impose extra customs checks and ban British fishing boats at some French ports from midnight. Official sources initially reported that neither side was backing down in the post-Brexit row.

However, David Frost, the UK’s Brexit secretary, is to meet Clément Beaune, the French minister for EU affairs, in Paris on Thursday, to discuss possible ways out of the crisis. Beaune tweeted that he had already spoken to Frost on Monday and that he expected a response to Paris’s compromise proposal by Wednesday.

He wrote that he looked forward to an “in-depth discussion” with Frost over the range of post-Brexit issues causing problems in the British-Franco relationship.

France has been infuriated that some of its small boats are being denied permission to fish in the waters around the UK and Channel Islands. The UK insists its licensing regime is reasonable and it will continue to require boats to provide evidence that they have previously fished in those waters on at least four days in the last four years.

Johnson and Macron had bumped fists as they arrived at the Cop26 summit on Monday.

At a post-G20 press conference on Sunday, Macron initially insisted that Britain had to give ground or France would trigger trade reprisals this week. “The ball is in Britain’s court. If the British make no movement, the measures of 2 November will have to be put in place,” he said.

But on Monday evening, the French president said he had pushed back the deadline by which Paris had said it would impose the new measures.

Earlier in the day, Liz Truss, the UK foreign secretary, had told France it had 48 hours to back down on threats or Britain would begin dispute talks set out in the Brexit deal.

A spokesman for Johnson suggested there would not be retaliatory UK trade measures, but action could be triggered through the dispute mechanism. “Depending on if, or what, the French decide to do, we will enact them as and when we need to,” he said.

A meeting to find a compromise, organised by the European Commission with officials from the UK, Jersey and France, had initially been marked by a lack of movement by both sides on Monday, with sources describing the mood as sour.

Jersey’s government was preparing to provide its fishers with financial support in the expectation that its vessels would not be able to land catches in French ports. The Jersey Fishermen’s Association (JFA) also called for the island’s authorities to respond in kind to the expected crisis by closing off the whelk and scallop fisheries to French vessels and banning dredging and trawling “with immediate effect for a period of six weeks”.

The talks continued late into the evening, however.

The diplomatic row over fishing, a very small sector of the UK economy, threatened to overshadow the G20 talks, which took place in Rome at the weekend, and also the Cop26 summit.

Almost 1,700 EU vessels have been licensed to fish in UK waters, equating to 98% of EU applications for fishing licences, the UK government says, but this figure is disputed in Paris. The main area of disagreement is over the number of small French vessels given access to the immediate coastal waters of the UK and Jersey. On Monday evening, the UK government spokesperson said it would consider any new evidence to support the remaining licence applications.

Truss had suggested on Monday that Macron may be making “unreasonable threats” because he has a difficult election looming.

Asked about whether France and the UK had come to an agreement, she told Sky News: “The deal hasn’t been done. The French have made completely unreasonable threats, including to the Channel Islands and to our fishing industry and they need to withdraw those threats.”

Asked why the row had emerged, she said: “You might say there’s a French election coming up.” Seeming angered by the dispute, she added: “I’m not remotely happy about what has happened.”

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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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