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Today’s headlines – 18 July 2016
PMI survey signals sharp downturn in UK economy
The PMI fell sharply to its lowest level since early 2009 as businesses responded to the uncertainty created by the vote to leave the European Union by cutting output and labour costs. Data firm IHS Markit said its CIPS purchasing managers’ survey, which measures private-sector activity across manufacturing and service sectors, fell to 47.7 in July from 52.4 in June. A reading below 50 indicates activity is contracting. The data has prompted some city economists to speculate that the UK economy will shrink in the third quarter this year. “What it tells us is that business confidence has been dented, they’re not sure, they’re in a period of uncertainty,” said the Philip Hammond, the chancellor, adding; “we will have the opportunity with our Autumn Statement…to reset fiscal policy if we deem it necessary to do in the light of the data that will emerge over the coming months.”More info.
EDF poised to decide on Hinkley investment
The energy giant EDF is expected to make its long-awaited final investment decision on a new nuclear power plant at Hinkley Point in Somerset next week. The French state-owned utility said it would hold a board meeting next Thursday at which point a final investment decision will be reached. EDF has been hit by financial problems in recent months as it struggles to cope with problems at its Flamanville station in northern France. Last week, the chancellor Philip Hammond made that clear when he said that he believed it was vital to the UK economy and worth the substantial – and still rising – cost. Early signs suggest that the company is likely to go ahead with the deal, with a recent company statement praising Hinkley Point as a “unique asset for the Franch industry” as it would benefit the “whole of the nuclear industry and support employment in major companies and smaller enterprises in the sector.” More info.
EU open to ‘different’ Scotland position, says SNP’s Smith
European leaders have undergone a “total inversion” in their attitude to Scotland after the Brexit vote which is likely to secure the country’s relations with the EU, according to SNP deputy leadership hopeful Alyn Smith. Launching his bid earlier this week, he said the SNP must “embrace Europe and put the European question at the heart of how we do business as a Party, at home, as well as in the wider world”. Scotland voted overwhelmingly to stay in the EU last month, but the weight of Leave votes in England and Wales led to a UK majority for Brexit. Scotland’s first minister Nicola Sturgeon made clear during the referendum campaign that such an outcome would create the “material change” in circumstances to trigger a second independence referendum. Mr Smith added: “We need to make clear, to ourselves as a Party, to Scotland and to the wider world, that we choose Europe as our future, Westminster is our past.” More info.
Owen Smith hires Jeremy Corbyn’s former policy adviser
Owen Smith has hired Jeremy Corbyn’s former director of policy to lead his Labour leadership campaign. Neale Coleman, who is well respect across the Labour Party, was a key adviser to both Ken Livingstone and Boris Johnson when they were London mayors, and played a key role in the delivery of the 2012 Olympics. He stepped down from Mr Corbyn’s team in December last year citing “pressures of the job” on his family life. Although it was also reported at the time that his departure was prompted by a growing rift between Mr Coleman and Mr Corbyn’s communications director, Seumas Milne. Announcing his new campaign team Mr Smith said he was “delighted” that the highly-regarded Mr Coleman agreed to join his inner-circle as his chief policy adviser. “He has a wealth of expertise, including working across major projects in City Hall, where he helped deliver the 2012 Olympics,” he said. More info.
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