Global News
Brexit – Having suffered a week of defeats and resignations, Johnson remains defiant, working towards Britain leaving the EU on 31st October. The start of the week saw Johnson’s Irish counterpart Leo Varadkar stand firm regarding the issue of the Irish border. A bill designed to block a no-deal Brexit was passed, leaving the government searching for loopholes. However, many of the various routes Johnson could decide to venture down are all leading to an election. The pound has plunged 17% since the Brexit referendum in June 2016, however, saw a slight gain following the surprise announcement that John Bercow plans to step down by 31st October. US-
China trade war – An unexpected contraction of Chinese exports in August, highlighted the impact of the trade war with the US. A sour mood was worsened this week, following Chinese trade data, as unattractive factory prices signalled a worsening economic slowdown. On Thursday President Donald Trump offered a limited trade agreement to China that will delay and even roll back some US tariffs for the first time. Trump backed away from his full threat of 10% tariffs on $300 billion of Chinese imports starting in September. U.S. trade representative office added that some products will not get hit with new levies until 15th December including phones, laptop computers etc. However, the president himself sounded less convinced, saying he would consider an interim offer, though “there’s a deal or there’s not a deal.”
European Central Bank (ECB) interest rate cut – On Thursday the ECB announced a -0.10% rate cut, taking the deposit rate to a record low -0.50%. Along with a rate cut the ECB announced that they would revive the stimulus programme by buying €2.6tn of bonds, however they did not specify over what period. This marked the largest rate cut and stimulus package in 3 years, as ECB president Mario Draghi stated that they needed to act quickly to revive the subdued eurozone growth. The action the ECB has taken was applauded by US president Donald Trump who praised how quickly the bank had acted to re-stimulate growth.
