1 UK interest rates to stay at record low (Katie
Allen in The Guardian) The prospect of a UK interest rate rise has receded
further after the Bank of England cut its forecasts for growth, wages and
inflation. However, the governor, Mark Carney, warned borrowers against getting
too comfortable with rock-bottom rates.
Carney quashed recent market speculation that a
global economic slowdown could prompt a rate cut. But at the same time, the
Bank revealed that its policymakers had voted unanimously to hold borrowing
costs this month and they gave little indication that there would be an early
increase.
The Bank governor used his quarterly inflation
report briefing to say that after almost seven years at a record low of 0.5%,
interest rates were “more likely than not” to need to go up over the next two
years. He also cautioned against repeating the mistakes of the past, when rate
rises had come as a shock to indebted households and businesses.
After a tumultuous start to the year on financial
markets thanks to jitters over China’s economic slowdown, the Bank predicted
that emerging economies were likely to grow more slowly than in recent years
and that global growth would be “only modest”.
2 Indonesia growth slows for fifth year (BBC) Growth
in South East Asia's largest economy, Indonesia, has come in at 4.76% for 2015,
marking the fifth consecutive yearly decline. Weaker commodity prices and
consumer spending, together with a slowdown in its key trading partner, China,
has hurt growth.
Towards the end of last year, however, the economy
expanded by just over 5%, boosted by government spending. President Joko Widodo
had promised to lift annual growth to 7% on average. However, the country has
seen an average of just under 6% growth over the past decade and analysts have
said growth is unlikely to improve for some time.
Mr Widodo made his promise to raise growth when his
five-year term began in 2014, but he has faced problems boosting government
spending and has seen several large infrastructure projects delayed.
A $5.5bn high-speed railway project, funded by
China, was signed last year and is scheduled to be up and running by 2019. But
the project has faced widespread objections from transport experts and its
long-term viability has been questioned.
Mr Widodo has also faced international condemnation
for the country's man-made forest fires, which have caused serious economic and
environmental damage. In December, the World Bank said Indonesia's forest fires
last year had likely cost the country more than twice the amount spent on
reconstruction efforts after the 2004 Aceh tsunami. In its quarterly report,
the bank said the fires had cost some $15.72bn.
3 Shell confirms 10,000 job losses (Khaleej Times) Royal
Dutch Shell on Thursday announced an 87-per cent plunge in annual net profits
on slumping oil prices. The Anglo-Dutch group reported profit after tax of
$1.94 billion for 2015, compared with almost $15 billion the previous year.
The slump had been expected after Shell announced
two weeks ago that it foresaw annual profit of between $1.6 billion and $2.0
billion. The update comes as Shell is
slashing thousands of jobs, selling assets worth billions of dollars and
exiting projects as oil prices tumble on world markets. The company is
meanwhile close to completing a mega-takeover of British rival BG Group.
"We are making substantial changes in the
company, reorganising... and reducing costs and capital investment, as we
refocus Shell, and respond to lower oil prices," Royal Dutch Shell chief
executive Ben van Beurden said in the earnings statement. "As we have
previously indicated, this will include a reduction of some 10,000 staff and
direct contractor positions in 2015-16 across both companies."
The company is very near to finalising a $68-billion
takeover of smaller British rival BG Group after the pair won shareholder
backing and cleared regulatory hurdles. The deal is intended at strengthening
Shell's position in the liquefied natural gas market.
Oil companies have been downsizing staff and
mothballing drilling rigs in response to a drop in oil prices from more than
$100 a barrel in July 2014 to about $30 currently. On Tuesday, US energy giant
ExxonMobil announced plans to slash its capital budget and suspend a share
repurchase programme. The same day, British group BP posted its biggest loss in
at least 20 years and announced plans to axe 3,000 jobs.
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