Reeves warns of greater trade barriers with EU unless relationship improves
Jennifer Rankin
Rachel Reeves has said the UK will face greater barriers to future trade with the European Union, unless there is an improvement in the trading relationship, reports our Brussels correspondent Jennifer Rankin.
Since Brexit the EU has developed new regulations that will impose more costs and red tape on companies outside the bloc, such as carbon tariffs on imports known as a carbon-border adjustment mechanism, to new rules on recycling plastic packaging.
Speaking to journalists ahead of a meeting with eurozone finance ministers today, the first of its kind since Brexit, the chancellor said:
I am not denying that there are barriers [to trade with the EU], and there will be greater barriers in the future, unless we improve our trading relationship with the European Union, which is exactly why I’m here.
Key events
Closing summary
Oil and gold prices have risen following the fall of the Syrian dictator Bashar al–Assad, who has fled to Russia.
You can follow the latest developments here:
Brent crude futures have gained $1.41 a barrel, or 2%, to $72.52 a barrel, while US crude futures advanced by $1.57 a barrel, or 2.3%, to $68.77 a barrel.
Spot gold, seen as a safe haven, rose by 1.45% and earlier hit a daily high of $2,676 an ounce.
European stock markets are pushing higher while shares on Wall Street slipped. The FTSE 100 index in London rose by 0.65% to 8,362 while Germany’s Dax was flat, France’s CAC climbed by more than 1% and the Italian borsa fell by 0.3%.
The S&P 500 and the Nasdaq both fell by around 0.3% while the Dow Jones was flat.
Rachel Reeves has said the UK will face greater barriers to future trade with the European Union, unless there is an improvement in the trading relationship.
Since Brexit the EU has developed new regulations that will impose more costs and red tape on companies outside the bloc, such as carbon tariffs on imports known as a carbon-border adjustment mechanism, to new rules on recycling plastic packaging.
Speaking to journalists ahead of a meeting with eurozone finance ministers today, the first of its kind since Brexit, the chancellor said:
I am not denying that there are barriers [to trade with the EU], and there will be greater barriers in the future, unless we improve our trading relationship with the European Union, which is exactly why I’m here.
She also said that reopening the debate about joining the EU’s single market and customs union would not be good for the country or the economy.
Thank you for reading. We’ll be back tomorrow. Take care! – JK
Volkswagen workers issue ultimatum and warn of strike escalation
Volkswagen workers said the German carmaker’s management has one last chance to compromise on Monday – or risk strikes on a scale not previously seen by the company, as talks began in a bitter standoff over pay cuts and factory closures.
VW staff downed tools at nine German sites which are under threat, while thousands of workers marched waving flags and blowing whistles to a square to listen to union leaders in Wolfsburg, where the carmaker has its headquarters, Reuters reports.
The latest negotiations come as Europe’s largest carmaker seeks ways to slash costs in Germany to better compete with cheaper Asian rivals that have entered its home market.
Last week’s strikes at VW‘s four carmaking factories cost Volkswagen just under €40,000 euros a minute, a source close to the company told Reuters.
Around 38,000 workers went on strike for four hours in Wolfsburg from the early and middle shifts alone, with the late and night shifts still to follow, the IG Metall union said.
The strikes are already more widespread than the last round of major industrial action at VW in 2018, when more than 50,000 workers went on so-called “warning strikes” over pay at six sites. “Warning strikes” are flagged in advance and of limited duration.
VW‘s management must signal their readiness to make bigger concessions on factors including their own pay and the dividend for unions to take forward negotiations this year, a source said.
Union IG Metall chief negotiator Thorsten Gröger said
Today, the workforce is taking a stand in the form of a nationwide warning strike.
The New Year’s Eve fireworks will be followed by an escalation that this company has never experienced before.
Gröger said management had “one last chance” to get back on track and find a solution this week or next. In the 1970s, a last-minute agreement over pay disputes was reached the night before strikes were due to begin.
Omnicom buys Interpublic to create world’s biggest ad agency
Omnicom is buying Interpublic Group in an all-share deal that will create the world’s largest advertising agency with combined annual revenue of almost $26bn.
The New York City agencies have had a hand in iconic marketing campaigns like “Got Milk” for the California Milk Processor Board, “Priceless” for Mastercard, “Because I’m Worth It” for L’Oreal and “Think Different” for Apple.
The combined company will be worth more than $30bn.
Pizza Hut criticised over ‘dangerous’ takeaway promotion including free spins at online roulette
Pizza Hut has been criticised for running a “dangerous” promotion that offered customers “free spins” at online casinos with their takeaway.
Online pizza orders were accompanied by a message congratulating customers for having “unlocked up to 300 free spins at your favourite casino”.
The message continued: “No deposit required! Claim your spins today!”
Online casino games are associated with significantly higher rates of addiction than most other forms of gambling, according to multiple studies. The government recently acted to limit maximum stakes on such games to £5, or £2 for under-25s, a measure that will take effect next year.
The Pizza Hut promotion drew fury from campaigners including the former leader of the Conservative party, Iain Duncan Smith, and Annie Ashton, whose husband, Luke, took his own life after battling a gambling addiction partly fuelled by “free” bets.
Harrogate Spring Water plans to cut down wood planted by schoolchildren
Harrogate Spring Water, which is owned by the multinational Danone,is planning to cut down a wood planted by schoolchildren in order to expand its bottling factory in the North Yorkshire town.
Two primary schools, along with other local volunteers, helped to plant 450 trees in a project organised by the Rotary Club of Harrogate almost 20 years ago.
“They taught us that trees made oxygen and were good for us,” said Lily Stockburn who took part in the tree-planting when she was six years old. “I’m devastated they want to destroy it. To cut down trees to make more plastic bottles goes against everything we learned.”
“It’s lovely woodland. Lots of people walk their dogs there, there’s loads of wildlife,” she added.
Only richest 10% of households can afford average home in England
Richard Partington
Only the richest 10% of households can afford to buy an average-priced home in England, according to official figures laying bare the scale of Britain’s broken housing market.
Highlighting the result of decades of house prices outstripping the growth in household incomes, the Office for National Statistics said the cost of buying a home was “unaffordable” in every part of the UK except Northern Ireland.
It said it would take as many as 8.6 years of average annual household disposable income in England, of £35,000, to afford an average-priced home, worth £298,000 last year – almost double the ratio recorded in 1999.
The equivalent ratios were 5.8 in Wales, 5.6 in Scotland and 5 in Northern Ireland, where the average property is only just considered within reach for most families. The ONS defines affordability as a local average house price costing less than five years local average income.
On that basis it said only households with disposable incomes of at least £69,677 – placing them within the top 10% in England – could be considered reasonably able to afford an average-priced home in the country.
In Wales, this applied to households in the top 30%, and in Scotland for the top 40%. Only in Northern Ireland was an average-priced home affordable for a household with an average income.
In London, where house prices have rocketed most in the past two decades, even many households in the top 10% of local earners – with disposable incomes of at least £89,901 – would not be able to afford an average-priced property.
An average home changed hands in the capital for about £530,000 last year, equivalent to 14.1 years of average income. For those in the top 10%, it would take 5.9 years to buy an average property, while it would take 34.7 years for those in the bottom tenth.
Jennifer Rankin
Rachel Reeves said reopening the debate about joining the EU’s single market and customs union would not be good for the country or the economy.
Reeves said the deal secured by Boris Johnson was not the best and that she wanted to do “practical things” to improve the trading relationship.
But do we want to reopen a national conversation about our membership of the EU, single market and customs union? Do I think that would be good for us as a country, or indeed good for the economy? I don’t think so. I think those years of uncertainty [during the Brexit negotiations] were bad for the UK, both politically and indeed economically.
At the meeting with the 20 finance ministers of the eurozone, she was expected to discuss the war in Ukraine, global trade and competitiveness. She rejected suggestions that greater closeness to the EU would risk the UK’s relationship with the US under incoming President Donald Trump.
To try and pick a side I think would be very damaging to the UK economy, and we’re not going to do that.
Reeves warns of greater trade barriers with EU unless relationship improves
Jennifer Rankin
Rachel Reeves has said the UK will face greater barriers to future trade with the European Union, unless there is an improvement in the trading relationship, reports our Brussels correspondent Jennifer Rankin.
Since Brexit the EU has developed new regulations that will impose more costs and red tape on companies outside the bloc, such as carbon tariffs on imports known as a carbon-border adjustment mechanism, to new rules on recycling plastic packaging.
Speaking to journalists ahead of a meeting with eurozone finance ministers today, the first of its kind since Brexit, the chancellor said:
I am not denying that there are barriers [to trade with the EU], and there will be greater barriers in the future, unless we improve our trading relationship with the European Union, which is exactly why I’m here.
Bank of England’s Ramsden says Bank will be vigilant over greater risk-taking
The Bank of England will be vigilant over the possibility that investors will take greater risks after a year of relative stability in markets, according to Dave Ramsden, deputy governor in charge of markets.
Ramsden said in in the text of a speech at the Official Monetary and Financial Institutions Forum, a think tank:
I am also mindful that whilst this has been a year of relative stability, that is never a sign that we should get complacent.
As famed economist Hyman Minsky once said, ‘stability breeds instability’ and the comparatively calmer market conditions of this year could lead to greater risk-taking in future.
Down by the sea: poverty brings Blackpool life expectancy to UK low, writes our North of England editor Josh Halliday.
It is a league table that no one wants to top. For the first time in 20 years, Blackpool, a once-glamorous seaside resort, this week overtook Glasgow to have the lowest average male life expectancy in the UK.
Men born in Blackpool will now live until just after their 73rd birthday on average, according to the Office for National Statistics (ONS) study, six years less than the average in the rest of England.
The figures highlighted an uncomfortable truism about modern life in Britain: wealth brings health and poverty kills, in what the ONS called a “clear” north-south divide.
Those born in the wealthy Hampshire district of Hart tend to live a full decade longer than those in the poorest areas, while men born in the south-east of England will live three years longer on average than those in the north-east.
Here is our full story on Boohoo:
I’ve seen how declining British high streets can be brought back to vibrant life, writes Holly Lewis, co-founding partner at the research, urbanism and architecture practice We Made That, and town architect for London Borough of Hackney.
If you have been reading anything about high streets recently, the chances are at least some of it included the reporting of another closure or collapse: M&S and Boots shutting stores, banks closing branches, pubs withdrawing. The list is long, and perhaps we would be less concerned if we were all confident that one ailing business would be replaced with another, more dynamic one. But for many of our high streets, that is not the case.
Against that gloomy backdrop, a report published at the end of November by the House of Lords’ built environment committee makes for refreshing reading, opening with evidence of “an optimistic and flourishing future” for our high streets.
Nevertheless, the report is honest about the scale of the problem. High street vacancy remains a persistent challenge in too many town and city centres. Earlier this year, a government consultation on this issue cited 172,000 empty units across the UK, with 80% of those having been vacant for more than two years.
Lebanon dollar bonds rally on hopes of more stability
Lebanon’s dollar-denominated bonds have rallied by more than 1%, after rebels in neighbouring Syria toppled president Bashar al-Assad – amid expectations this could weaken Lebanese armed group Hezbollah and bring political and economic stability.
Lebanon’s 2029 bond gained the most, up 1.05 cents to 11.78 cents on the dollar, its highest level since December 2022, Reuters reported, citing Tradeweb data. Israel’s international bonds also rose slightly.
Lebanese bond prices remain distressed, although the bonds have rallied at several points since Israel began bombing Lebanon, which investors attributed to hopes that a weakened Hezbollah could break political deadlock and enable progress toward sustainable fiscal policies.
In Syria, rebels seized the capital Damascus in a lightning advance over the weekend and Assad fled to Russia following 13 years of civil war and five decades of dynastic rule.
Analysts said this meant Iran had lost a key component of its arc of influence in the region, as well as its overland link with Hezbollah in Lebanon.
Hasnain Malik at Tellimer Research told Reuters:
This undermines Hezbollah further, which, in the near term, means lower security risk for Israel and a potentially more market-friendly government in Lebanon,” said .
Hezbollah has played a big part in the power struggle in Lebanon, which has had no head of state or a fully empowered cabinet since ex-president Michel Aoun’s term ended at the end of October 2022, with the country mired in one of the world’s worst economic crises .
The latest events might force a weakened Hezbollah to play a more constructive role, said Tim Ash, senior sovereign strategist at RBC BlueBay Asset Management.
New international focus on a wider Levant reconstruction effort will surely drag Lebanon along with Syrian coattails – assuming some stability and political reform in Syria itself.