Monday, September 15, 2014

Big economies' growth forecasts cut; Gaultier quits ready-to-wear clothes; Scottish independence and India

1 Big economies’ growth forecasts cut (Katie Allen in The Guardian) The global economy faces headwinds from a sluggish eurozone and rising political tensions, including the uncertain outcome of Scotland's independence referendum, a leading thinktank has warned. The Organisation for Economic Co-operation and Development slashed its growth forecasts for advanced economies and called on the European Central Bank (ECB) to use quantitative easing to shore up the eurozone.

Updating its economic outlook before a G20 meeting of finance ministers in Australia this week, the Paris-based thinktank described continued slow growth in the euro area as the "most worrying feature" of its new projections. Its deputy secretary-general Rintaro Tamaki said: "The global economy is expanding unevenly, and at only a moderate rate. Trade growth therefore remains sluggish and labour market conditions in the main advanced economies are improving only gradually, with far too many people still unable to find good jobs worldwide.”

The OECD now forecasts eurozone GDP will grow just 0.8% this year, down from the previous forecast for 1.2% growth made in May's outlook. In 2015, it expects the eurozone to grow 1.1%,  down from the 1.7% forecast in May. It also cut its US GDP forecast for this year to 2.1% from 2.6%. 

The OECD's gloomier outlook coincided with weaker manufacturing numbers from both China and the US. Financial markets were shaken after data released over the weekend showed China's industrial sector posted the weakest growth since the financial crisis began six years ago. In the US, manufacturing output declined in August for the first time in seven months, reflecting a sharp fall in production at car plants after a jump in July.


2 Gaultier quits ready-to-wear clothes (BBC) French fashion house Jean Paul Gaultier has said it will stop making ready-to-wear clothes for both men and women. The house, controlled by Spanish perfume maker Puig, said it would instead concentrate on exclusive custom-made clothes known as "haute couture" and its perfume lines.

Mr Gaultier, one of the world's best known designers, launched his business in the early 1980s. Puig bought control of the firm in 2011 from Hermes. The firm said its final ready-to-wear collection for spring and summer next year would be launched later this month. It did not comment on the reasons for the closure or how many jobs were likely to be affected.


3 India and the Scottish independence (MJ Akbar in Khaleej Times) For an Indian who has always believed that the partition of India was a deep, self-inflicted wound carved by a British knife, the thought that Britain might split into two nations on September 18 is not without some satisfaction. History is rarely synonymous with justice, but when the echo of some form of retribution fills the air, we might sit back and enjoy the music.

London has probably never been so startled since Lord Cornwallis returned from the American colonies with news that some upstart called George Washington had won the war. A pithy argument became the great persuader: Scotland was not leaving England, it was joining the world. There is no certainty that a majority of Scots will vote for separation on the 18th. But we can be sure about one thing: the margin will be narrow, and Great Britain, if it survives, will become a geographical rather than a political union. Enough Scots are now convinced that they can create a society of five million people that will be culturally secure, and economically caring.

What odds then, that on September 18, 2024, Britain will hold a referendum in England for English independence? Don’t dismiss the thought. More amazing things have happened in the weave and waft of nations. The marriage between England and Scotland is over. If divorce proceedings fail, then it is only because one partner is offering economic terms that are unsustainable in the long, or perhaps even the medium, run. Moreover, every divorce includes some sort of mess that you would rather not face.

Once upon a time this marriage worked because England and Scotland together had children both cared about, and, more pertinently, both benefited hugely from. They were called the colonies. India was the jewel child of the family. But that child has grown up, and gone its own way along with siblings. The children used to visit for a while; now they don’t bother. Indians now prefer to visit an uncle called Sam, rather than a mummy called Elizabeth.

The parents remain prosperous enough, but they do not have much to do with each other. Scotland, less burdened by sentiment, has been realistic enough to signal time-out, and then pushed for separation. England is dangling a new honeymoon, while threatening that there will never be any alimony. We shall see what happens, but the relationship is fundamentally dead. If they don’t bury it now, they will a little later.


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