Friday, December 23, 2016

UK growth revised up to 0.6%; Bailout for world's oldest bank; Shanghai water supply hit by 100-tonne garbage wave

1 UK growth revised up to 0.6% (BBC) The UK economy grew by 0.6% in the third quarter, according to official figures, faster than previous estimates. Growth for the July-to-September period had originally been estimated at 0.5%. New data from the Office for National Statistics (ONS) suggested that the business and financial sector was more active than previously estimated.

The ONS also said that growth in the third quarter of the year was helped by "robust consumer demand". However, the ONS trimmed its estimates of growth in the first and second quarter of the year. It now says the economy grew by 0.3% in the first quarter, compared with an earlier figure of 0.4%, and cut its estimate for second-quarter growth to 0.6% from 0.7%.

Ruth Gregory, UK economist at Capital Economics, said the figures suggested that June's Brexit vote had had little impact on the economy and that growth in the final quarter of the year would be positive.


2 Bailout for world’s oldest bank (Straits Times) Italy's government is set to rescue Banca Monte dei Paschi di Siena after the world's oldest lender failed to raise €5 billion from the market, in what would be Italy's biggest bank nationalisation since the 1930s.

Italy will plough as much as €20 billion into its banks, providing both emergency liquidity guarantees and capital injections, as more lenders may seek lifelines soon. Monte Paschi said in a statement that it will ask the government for a "precautionary" capital increase.

"Overall, it's good news. Finally, we are heading toward a solution," Mr Jacopo Ceccatelli, head of broker-dealer Marzotto SIM, said. "Italy is doing now what other countries have done many years ago to sustain their banking system."

Italy's banks are struggling under the weight of €360 billion of bad loans, a plight that has eroded profitability and undermined investor confidence. A nationalisation of Monte Paschi could be followed by rescues for lenders like Veneto Banca and Banca Popolare di Vicenza. One of the world's oldest banks, Monte Paschi failed to raise money from private investors.

The industry's next test will arrive in January when UniCredit, Italy's biggest bank, begins selling €13 billion in shares. The lender's non-performing loans amount to about 15 per cent of its assets.


3 Shanghai water supply hit by 100-tonne garbage wave (Benjamin Haas in The Guardian) Medical waste, broken bottles and household trash are some of the items found in more than 100 tonnes of garbage salvaged near a drinking water reservoir in Shanghai. The suspected culprits are two ships that have been dumping waste upstream in the Yangtze river. It has then flowed 
downstream to the reservoir on Shanghai’s Chongming island which is also home to 700,000 people.

The reservoir at the mouth of the river is one of the four main sources of drinking water for the country’s largest city, according to local media. China has struggled with air, soil and water pollution for years during its economic boom, with officials often protecting industry and silencing citizens that complain.

China’s cities are often blanketed in toxic smog, while earlier this year more than 80% of water wells used by farms, factories and rural households was found to be unsafe for drinking because of pollution.

Videos circulating on social media showed beaches and wetlands covered in a rainbow of plastic bags. “This is so sad, just humanity digging its own grave,” one commenter on Twitter-like Sina Weibo said. Earlier this year more than 500 students developed nosebleeds, rashes and illnesses, some as severe as leukaemia, in what local media linked to illegal toxic dumping by chemical factories.

The country’s air pollution has been shown to contribute to more than 1 million deaths a year, linked to about a third of deaths in China’s major cities.


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