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Britain, Business, Economic, Government, Politics

Carney: A Brexit investment boom once deal with Brussels is signed

ECONOMIC

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Mark Carney told MPs on the Treasury select committee an investment boom will follow once a Brexit deal with Brussels is agreed.

THE Bank of England’s Governor Mark Carney has predicted that businesses will launch major investment drives after Britain signs its Brexit deal with Brussels.

Mr Carney said many firms had put off important spending decisions since the referendum but may turn on the taps when Britain’s future relationship with Brussels becomes clear.

In comments highlighting the importance of striking a deal, he claimed that families were already £900 a year poorer than they would have been if Britain had voted not to leave the EU.

But he said there may be a pick-up in economic growth and productivity once Brexit is settled.

Appearing before MPs on the Treasury select committee, he added: ‘It’s understandable businesses are holding back – there are some big, big decisions that are about to be made.

‘I could build a case to say that actually business will use those clean balance sheets, access finance and start to put capital to work, and we should see a sharp pick-up in business investment.’

Mr Carney – who warned before the 2016 referendum that Brexit could be an economic disaster – added that the economy was as much as 2 per cent smaller than it would have been if Britain had chosen to remain.

Mr Carney said: ‘Real household incomes are about £900 per household lower than we forecast in mid-2016, which is a lot of money.’

The comments drew an immediate riposte from Foreign Secretary Boris Johnson, a leading Brexiteer.

On a visit to Buenos Aires, Mr Johnson rejected the Governor’s view and argued that Britain will prosper outside the EU thanks to new trading opportunities with countries such as Argentina.

Pro-Brexit MP John Redwood dismissed the claims that families were £900 worse off, saying: ‘I see no evidence.’

John Longworth, former director-general of the British Chambers of Commerce, said: ‘He’s basing that number on forecasts which were flawed. There are lots of factors influencing that number.’

GOVERNMENT BORROWING

BRITAIN’S borrowing is at its lowest for 16 years as rising tax receipts confound warnings of economic doom following the Brexit referendum.

In a sign that the vote to leave the EU has done nothing to derail plans to put the country’s finances back on a stable footing, the Office for National Statistics (ONS) said the Government borrowed £40.5billion last year – down from £153billion in 2009-10 under the last Labour government.

It is also around half the amount George Osborne predicted Britain would borrow last year in the event of a Brexit vote.

The figures give the lie to warnings that the decision to leave the EU would crash the economy and hammer tax receipts.

Instead, last year’s deficit was 2 per cent of national income – the lowest since 2001-02, when Tony Blair and Gordon Brown began a debt-fuelled spending spree.

When the Tory-Lib Dem coalition came to power in 2010, the deficit stood at 9.9 per cent of gross domestic product.

Liz Truss, Chief Secretary to the Treasury, said: ‘Borrowing as a share of our economy is at a 16-year low.

‘This is testament to the hard work of the British people as we fix our finances and build a Britain fit for the future.

‘We are strengthening the economy whilst cutting income tax and investing in public services. Labour would put that all at risk with their bonkers borrowing binge.’

In the so-called dossier of dome issued two years ago, former chancellor Mr Osborne said borrowing would hit almost £78billion last year if voters opted for Brexit.

In the Autumn Statement in November 2016, the Office for Budget Responsibility (OBR) pencilled in borrowing of £59billion as it warned of the impact of the Brexit vote.

In fact, the Government borrowed £40.5billion as tax receipts rose 3.4 per cent to a record £701.8billion. Corporation tax receipts rose 6.3 per cent to £57.7billion.

It borrowed a further £7.8billion in April, the first month of the fiscal year – down from £9billion in the same month last year.

Receipts from income tax and capital gains tax jumped 12.3 per cent to £12.8billion last month as record levels of employment boosted Treasury coffers. VAT receipts rose 2.8 per cent to £11.5billion.

The figures will put pressure on Chancellor Philip Hammond to ease austerity and free funds for public-sector pay rises.

But with the national debt close to £1.8trillion, or 85.1 per cent of national income, he will be reluctant to embark on a spree.

The national debt has risen nearly six-fold since 2000, from just over £300billion to nearly £1.8trillion.

The Government spent £54.6billion in debt interest payments alone last year – which equates to more than £1billion a week.

INFLATION

PRICES are rising at the slowest pace for more than a year in a boost to millions of families, official figures show.

The ONS said the annual rate of inflation fell from 2.5 per cent in March to 2.4 per cent in April.

That was the lowest level since March last year and down from a post-Brexit referendum peak of 3.1 per cent in November.

Inflation has risen by far less than feared since the Brexit vote and now appears to be heading back towards the 2 per cent target, easing pressure on family finances.

Two years ago, then Chancellor George Osborne warned that a Brexit vote would push inflation towards 5 per cent this year. Instead, it is only a little above the 2 per cent rate the OBR forecast for 2018 had the country voted to remain in the EU.

Brexit supporters branded the warnings issued by Mr Osborne and other Remain campaigners ‘ridiculous and outrageous’. With inflation falling and wages rising at the fastest pace for more than three years, analysts have said that ‘things are looking up for UK households’.

Chancellor Philip Hammond said: ‘Good news on inflation – it fell to 2.4 per cent in April and is expected to keep falling. With wages going up that means more money in people’s pockets.’

However, it is feared that the rising oil price may keep inflation above the 2 per cent target for longer than hoped as the cost of petrol and diesel increases.

The ONS figures follow a string of reports showing UK employment at a record high, unemployment at a 43-year low across the country and government borrowing at the lowest level for 16 years.

The flurry of upbeat economic data contrasts with warnings that the Brexit vote would crash the economy.

Before the referendum, Mr Osborne warned of an ‘immediate and profound shock to our economy’ that would plunge the UK into recession, put as many as 820,000 out of work and result in government borrowing of almost £78billion this year.

Instead, the UK economy has grown for seven quarters in a row since the referendum, employment has risen by 609,000, unemployment has fallen from 4.9 per cent to 4.2 per cent, and borrowing was around half what Mr Osborne claimed it might be.

Conservative MP Andrew Bridgen said: ‘As time progresses, people are seeing just how ridiculous and outrageous this was. There must be many people who voted Remain who now regret it, who were intimidated by the prophets of doom and gloom.’

Oil prices have been climbing after US President Donald Trump said the country would leave the Iran nuclear deal, raising the prospect of a fall in supply from the Middle East.

Brent crude surged above $80 per barrel last week, sparking fears of further fuel price increases.

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Britain, Economic, Government, National Security, Russia, Society, United States

Russia’s ‘tremendous weapon’

CYBER WARFARE

SECURITY CHIEFS have warned that tens of thousands of British families’ computers have been targeted by Russia – potentially paving the way for a devastating cyber-attack.

. You might also like to read The terrifying era of internet warfare

They fear the Kremlin is trying to identify vulnerabilities allowing it to “lay a foundation for offensive future operations” that could cripple Britain.

The concern is that Russia could take control of these devices then use them to overload vital infrastructure systems such as banks, water supplies, energy networks, emergency services and even the Armed Forces.

A so-called “man-in-the-middle” attack could be carried out anonymously because the Government would not know who had hacked into these systems in UK homes.

Security chiefs said they feared Moscow-backed hackers were trying to create a “tremendous weapon” to unleash in “times of tension”. Britain’s eavesdropping agency GCHQ, the White House and the FBI have launched an unprecedented joint alert about “malicious cyber activity” carried out across the globe by the Kremlin.

They warned that Moscow was mounting a campaign to exploit vulnerable devices and threaten “our respective safety, security, and economic well-being”. It followed a recent warning that Vladimir Putin was ready to retaliate for the Western air strikes on Syria, where Bashar al-Assad’s regime is backed by Russia.

Britain has been tracking the online activity for more than a year, a spokesperson for the National Cyber-Security Centre (NCSC) said.

Kremlin-sponsored actors were said to be using “compromised routers” to conduct “spoofing” – when the attacker hides their identity – to “support espionage… and potentially lay a foundation for future offensive operations”.

In an unusual transatlantic briefing the NCSC said there are millions of machines being globally targeted, with the intent of trying to seize control over connectivity.

“In the case of targeting providers of internet services, it’s about gaining access to their customers to try to gain control over the devices.

“The purpose of these attacks could be espionage, it could be the theft of intellectual property, it could be positioning or use in times of tension. All of the attacks have directly affected the UK.”

The FBI says that US government experts had found themselves “unwittingly on the frontline of the battle” against Moscow’s cyber-attacks. The Bureau said that, if Russia were able to hack into a wireless router then “own it”, hackers could monitor all the traffic going through it. “It is a tremendous weapon”.

A White House cyber security co-ordinator warned the Kremlin that the US and Britain would respond to any attack. The UK has previously carried out a huge cyber offensive against Islamic State, and the US attacked the Iranian nuclear programme by launching the Stuxnet cyber- attack in 2010 which wholly deactivated the programme’s centrifuges.

The US and UK insist they are pushing back hard and say that cyber activity must be stopped and opposed at every turn. They are confident, however, that Russia has already carried out a co-ordinated campaign to gain access to enterprise, small office routers and residential routers – the kind of things that everyone has in their homes.

The NCSC, FBI and US department of homeland security warned that Russian state-sponsored actors were trying to spy on individuals, industries and the Government.

A joint UK-US statement said “multiple sources” – including private and public sector cyber security research organisations and allies – had reported such activity to governments. The communique said: “Russia is our most capable hostile adversary in cyberspace so dealing with their attacks is a major priority.”

A UK Government spokesperson said: “This is yet another example of Russia’s disregard for international norms and global order – this time through a campaign of cyber espionage and aggression, which attempts to disrupt governments and destabilise business. The attribution of this malicious activity sends a clear message to Russia – we know what you are doing, and you will not succeed.”

 

THE warning from intelligence agencies that Russia is launching a cyber offensive against our Government, infrastructure, companies and even families, with the intention of spreading chaos and panic, is hugely significant.

It is a chilling reminder for everyone – if one were needed – that for Vladimir Putin, bombs, missiles and poison gas aren’t the only weapons of war.

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Britain, Economic, Government, Politics, Russia, Society

UK measures and sanctions on Russia still leaves us vulnerable

BRITAINopinion-1

IN measured but uncompromising language, Theresa May handled herself extremely well in the House of Commons this week as she outlined the Government’s response to Vladimir Putin’s use of a lethal nerve and chemical agent on British soil. The Prime Minister’s rhetoric was equal to the profound seriousness of the occasion.

Her resolute demeanour and command of her brief – no doubt learned from her long experience of security matters at the Home Office – put to shame Jeremy Corbyn’s efforts to defend the Russian state and his attempt to score petty political point scoring.

In a new low for British politics, the Labour leader parroted the Kremlin line, suggesting it was unfair to blame Putin without first sending him scientific samples of the toxin in the Salisbury attack.

To his discredit, too, Mr Corbyn even appeared to pin part of the blame on budget cuts to the British diplomatic service.

Corbyn’s response to this grotesque violation of international law and British sovereignty – in which scores of our citizens were put at risk of agonising death – was: “It is essential to maintain robust dialogue with Russia.”

Who would honestly believe dialogue would bring to heel a former KGB officer who exults in presenting himself at stopping at nothing to eradicate his country’s enemies?

Even the SNP in Scotland, never a party solid on defence – incoherent on NATO and divisive over Trident – have grasped the gravity of the situation.

First Minister Nicola Sturgeon said: “It is very clear that Russia cannot be permitted to unlawfully kill or attempt to kill people on the streets of the UK with impunity.”

The SNP’s party’s Westminster leader Ian Blackford assured the Commons that his party backed the Government and that “a robust response to the use of terror on our streets” was required.

However, we must be realistic. On their own, the measures outlined by the Prime Minister are high unlikely to shake Putin out of his contempt for the international order.

 

YES, Mrs May’s approach is a start. Her expulsion of 23 Russian diplomats identified as spies, the most radical such measure for more than 30 years, should seriously undermine Russia’s intelligence network. These expulsions were always going to be met with a tit-for-tat response.

Other sanctions – including the freezing of Russian state assets deemed a threat, the suspension of high-level contacts and increased security checks on private flights, customs and freight – also sends a signal that Britain will not let state-sponsored gangsterism flourish with impunity.

The truth, though, is that Mrs May held back from other measures that could have inflicted serious harm on the Russian economy.

The reasons for such caution are clear. One is that Britain depends on Russia for 20 per cent of our gas, leaving us desperately vulnerable to punitive Russian reprisals.

Another is that BP, our biggest company, has a vast holding in Russia’s biggest oil company, while the City launders billions in the country’s dirty cash.

And politicians have run down our Armed Forces, spending only £36billion a year on defence. Putin, with a defence budget of £44-50billion – and has an army ten times the size of ours – will feel safe to sneer.

Yet, Russia’s economy is only two-thirds the size of ours. We could be doing much more to match Putin’s military strength.

As for energy security, wasn’t it criminally irresponsible to allow last year’s closure of Britain’s biggest gas storage facility, leaving our reserves at today’s perilously low levels?

Given our vulnerability, the sanctions may have gone as far as Britain could go alone without the international effort needed by straining every sinew to secure.

There is one gesture that could signify abhorrence of the Salisbury atrocity. Whilst it is welcomed that no government minister or member of the Royal family will attend the World Cup in Russia this summer, wouldn’t a boycott by the England team and other countries who are equally infuriated ram home the message more powerfully?

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