Monthly Archives: August 2014

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By Henry Foy in Warsaw

Pride and relief mixed on the streets of Warsaw the morning after Polish prime minister Donald Tusk’s election to the top of Europe’s political hierarchy, after seven years leading a country that is unsure of whether he would have remained in charge.

Mr Tusk’s selection as the new President of the European Council late on Saturday gives Poland the most important global political position in its history and confirms its rise to the continent’s top table.

But with his domestic ratings in the doldrums approaching a general election that his party will likely struggle to win, most are happy to wish him well on his way.

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Ebola virus (Getty)   © Getty

By Clive Cookson
Research into Ebola drugs and vaccines had been chugging along at a fairly leisurely pace for a decade or more – helped by some funding from the US government’s biodefence programme but not a priority for medical research in the public or private sector – until this year’s explosive Ebola epidemic in west Africa. Read more

The biggest development story of the last two decades has been the vast reduction in the number of the world’s extreme poor thanks to the rapid growth of China and other developing economies. But how does the US, the world’s richest economy, fit in when you apply the $2/day poverty line the World Bank and others normally use to grade much poorer countries?

In a fascinating new paper, researchers at the Brookings Institution look at exactly that question and come up with some potentially shocking findings, albeit ones that come with plenty of caveats attached. Read more

Treasury Select Committee...Bank of England governor Mark Carney answers questions in front of the Treasury Select Committee in the House of Commons, central London, on the subject of the Bank of England's quarterly inflation report and Scottish independence. PRESS ASSOCIATION Photo. Picture date: Tuesday March 11, 2014. Later today he will answer questions on the 'Economics of currency unions' and the Bank's Foreign Exchange Market Review. See PA story ECONOMY Bank. Photo credit should read: PA Wire

The Bank of England will weigh the weakness of Britain’s wage growth against the strength of its economic recovery when it delivers fresh forecasts in its quarterly inflation report on Wednesday morning, containing signals about when a rise in interest rates is likely.

<To be delivered in tandem with the latest UK employment data, the BoE’s estimates of the amount of slack in the economy will be one of the most closely watched metrics. At the last quarterly inflation report in May, the BoE estimated the amount of spare capacity was between 1 – 1.5 per cent, judging there was room for this to narrow further before rates tightened.

By Sarah O’Connor and Claer Barrett

 

The UK decision to send ground attack aircraft to perform reconnaissance missions over Iraq has led to mounting speculation that it could soon join the US in conducting bombing missions against Islamist extremists terrorising the local population.

The British government has so far resisted calls from some politicians and former officers to join the US in launching air strikes against insurgents from the Islamic State of Iraq and the Levant (known as Isis). But the type of aircraft it has sent to the region – the Tornado GR4 – leaves the option open. Read more

David Gardner

Recep Tayyip Erdogan just won his ninth straight popular vote in just over a decade, to become the first directly elected president of Turkey, in what is supposed to be his apotheosis, raising him to the historic height of Mustafa Kemal Ataturk, father of modern Turkey. As his opponents have recurring reason to know, Mr Erdogan has established an almost preternatural grip on the electorate that not even prima facie evidence of corruption, willful policy decisions, and creeping authoritarianism seem able to loosen. Now Turkey and the world will see if he is truly a statesman.

Nobody can gainsay Mr Erdogan his victory which, despite a comparatively low turnout, has given him a comfortable first round win. But after more than a decade as prime minister of a nation he has helped transform – not least by spreading wealth and giving a voice to those whom Ataturk’s secular republic kept at the margins of society – Mr Erdogan must now decide where to take a great and pivotal country he increasingly treats as his personal patrimony. Read more

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By Christian Oliver and Richard Milne

Europe’s leaders are preparing for a trade war with Russia by mapping out the battlefields on which they see the highest risk of casualties.

In data released on Friday, the European Commission identified the agricultural exporters most vulnerable to Moscow’s trade embargo on EU produce. Spanish peaches, Dutch cheeses and Polish apples find themselves squarely on the front line.

Polish fruit exports to Russia were valued at €340m last year and win the dubious honour of being the most exposed crops. The Poles have launched an impassioned public campaign to try to switch to more domestic consumption with their “Eat an apple to spite Putin” slogan.

The Netherlands (with dairy exports to Russia of €257m in 2013) and Finland (€253m) are at most risk on the milk and cheese front. Spain and Greece are vulnerable in relation to citrus, with stoned fruit such as peaches and nectarines also being described by farmers as being at crisis point in terms of storage overload and no market to go to. Read more

David Gardner

A Yazidi family that fled Sinjar in Iraq takes shelter in the Kurdish city of Dohuk ( SAFIN HAMED/AFP/Getty Images)

Barack Obama’s decision to move back into the maelstrom of Iraq, from which he withdrew in 2011 after solemnly pledging to extricate US forces once and for all, would clearly not have been taken lightly.

Little under a year ago, after all, the president baulked at the last fence on Syria, declining to punish the Assad regime for nerve-gassing its own people – crossing a red line he had chosen to single out as inviolable. That was the wrong decision, and it is worth a moment to remember why. Read more

Japan’s Government Investment Pension Fund, the world’s largest pool of publicly managed pension assets, is poised to make a change to its investment strategy that has equity markets salivating. Indications are that a review of its allocation guidelines, expected to be wrapped up next month, will raise the percentage of the fund’s roughly Y127tn ($1.3tn) portfolio that is dedicated to Japanese stocks, while reducing holdings of Japanese bonds.

The GPIF’s current guidelines are risk-averse by global standards, with the majority of the model portfolio dedicated to low-yielding Japanese public debt and just 12 per cent given over to domestic equities. Under the new guidelines, the equity level looks likely to rise to 20 per cent – a change that could send trillions of yen flowing into the Topix, the Nikkei and other Japanese share indices. And as of this week, key investment decisions will be made by the fund’s investment board, rather than Takahiro Mitani, its president. Read more

Emily Cadman

Welcome to our live coverage of ECB president Mario Draghi monthly press conference. Earlier the ECB kept its interest rates at their current record lows for the second month in a row.. Follow the questions and reaction live here with Lindsay Whipp and economics reporter Emily Cadman.