Tax cuts will revitalise the spirit that made Britain writes PATRICK MINFORD
PATRICK MINFORD: Just as I did with Mrs Thatcher, I am happy today to stand with Liz Truss, and defend the economic vision she has laid out in her leadership campaign. I believe the British economy can easily withstand the increase in borrowing needed to fund Liz Truss’s key promise: to start cutting taxes from her first day if elected to No 10. We need to revitalise our entrepreneurial spirit, just as Mrs Thatcher did, and this is the way to do it.
more and more economic data indicate that Germany is probably heading for an economic downturn. That should tighten - depending on how hard the winter becomes. © Christophe Gateau/dpa/picture Alliance Provided by Deutsche Welle
for the fifth time in a row, the German Industry received fewer orders than in the respective previous month. In June, orders decreased by 0.4 percent compared to May. What looks like at first glance adds up to a minus of 5.6 percent in the second quarter. Even if the current order stock - also because of the persistent problems with the supply chains - is still very high, it should not prevent the economic problems from striking through industrial production, says Jörg Krämer, chief economist at Commerzbank: "The risk of one Recession increases. "
England vs Germany live stream and how to watch the Women's Euro 2022 Final for free online and on TV, team news
Can England defeat eight-time Euro winners Germany and take the title? Here's how to watch an England vs Germany live stream free from wherever you are.England's semi-final victory over Sweden looked comfortable on paper, but the 4-0 scoreline didn't tell the whole story. The Lionesses had to survive some early scares, most notably Stina Blackstenius hitting the bar, but goals change games and Beth Mead's opener gave Sarina Wiegman's side belief. Alessia Russo's outrageous backheel nutmeg knocked the stuffing out of the Swedes, with Fran Kirby's cheeky chip sealing the deal.
This also counts on other economists. A technical recession - a shrinking of the economy in two consecutive quarters - also expects the decabank. "But it could also be that the recession from the fourth quarter of this year extends to the second quarter of the coming year," says its economic expert Andreas Scheuerle. However, the decline in orders is only a sign of the difficult economic situation. There are several reasons for economic weakness.
inflation eats purchasing power on
There is the high inflation , which weakens the purchasing power of consumers: "Citizens can no longer afford and may not want it anymore," says Scheuerle. Because the uncertainty is great as to what costs could still apply to you about the increasing energy prices and the gas surcharge due to the war. The consumer climate index of the Nuremberg GfK showed how bad the buying mood is at the end of July when the mood barometer continued to sag.
ALEX BRUMMER: Excess rate hikes won't help with higher prices
Until November 2021 Andrew Bailey and the Bank of England had consistently claimed that higher inflation was transitory. It then worried it was becoming more persistent.Until November 2021 Andrew Bailey and the Bank of England had consistently claimed that higher inflation was transitory. It then worried it was becoming more persistent and with today’s widely expected rise the Bank will have raised the cost of borrowing from super-low Covid levels six months in a row.
© Bernd Weißbrod/dpa/picture Alliance production line at Motor saw manufacturer Stihl
On the other hand, the global economy is also weakened, especially the USA, one of the most important sales markets for German industry. Because inflation is so high there, the American central bank Fed tightens the reins much faster and stronger than the ECB in the euro area. And thirdly, the uncertainty about the gas supply also presses companies. "There will probably be no strong rationing in winter," says Dekabank economist Scheuerle. But companies are likely to save on gas consumption so that it would be less possible than that would be possible under normal conditions.
and last but not least, nobody currently knows how much the Coronavirus will spread again in winter. This was mainly due to higher sick leave. Lockdowns in Germany should probably no longer exist, Scheuerle believes. But: "You always have to expect that a location or a port in China will temporarily close." You could see in spring what effects this has on the supply chains.
Liz Truss insists Bank-predicted recession is ‘not inevitable’
The Tory leadership contender said ‘bold’ action cutting taxes now is needed to prevent ‘very, very difficult times’.The Foreign Secretary used Sky’s televised debate for the Tory leadership contest to warn of “very, very difficult times” without “bold” action rather than her rival’s caution.
Fear of the gas crisis paralyzes companies
overall, so the confidence of the companies decreases. The important IFO business climate index shows that the demand situation in July deteriorated compared to the previous month. And the business expectations, which the Munich economic researchers always query, have fallen strongly for the next six months. This is a level that can be observed in recessions that it reflects "tangible risks", analyzes Jörg Krämer from Commerzbank: "After all, Putin plays on the Gashahn and fuels the fear of a gas crisis ." He wanted to make the German public; "This nerve war around the gas also unsettled companies and makes them more careful when ordering." In some cases, customers could also cancel or move orders and can be heard. This would gradually use the high order pad that industry had calmed down in the past two years.
A recession is almost inevitable. However, it should not be as sharp and deep as in the financial crisis after the Lehman bankruptcy or in the first months of Corona pandemic. "In the top, the German economy could shrink by 0.4 percent," estimates Dekabank-Volkswirt Scheuerle. But the upswing will not be so strong afterwards. Because the problem of gas shortage continues. Even in the winter of the coming year, you will probably have to expect further loads. And that could then at least persuade parts of German industry to move their production abroad, where energy is cheaper and on site. The current difficulties could therefore lead to long -term structural changes in the economy.
Author: Brigitte Scholtes
United Kingdom: The fight against the economic crisis will have to wait for the successor of Boris Johnson .
according to Downing Street, "it will be up to the future Prime Minister" to take care of "making major budgetary changes" © Matt Dunham/ /Sipa British Prime Minister Boris Johnson in front of the 10 Downing Street, in London on July 20, 2022. DESEGRAGAGE - According to Downing Street, "it will be to the future Prime Minister" to take care of "to make major budgetary changes" Fight against Inflation and the recession will have to wait in the United Kingdom.