1 IMF head warns of weaker growth (BBC) The head of
the International Monetary Fund has warned global growth is likely to be weaker
this year than last. Christine Lagarde also said she expected there would be
only a modest acceleration in 2016. And she warned there could be an economic
"vicious cycle" caused by higher US interest rates and the Chinese
slowdown.
She said these threats could jeopardise recent economic
gains in Asia, Latin America and Asia. She said: "The good news is that we
are seeing a modest pickup in advanced economies. The moderate recovery is
strengthening in the euro Area; Japan is returning to positive growth; and
activity remains robust in the US and the UK as well.
"The not-so-good news is that emerging
economies are likely to see their fifth consecutive year of declining rates of
growth." She added: "On the economic front, there is ... reason to be
concerned. The prospect of rising interest rates in the US and China's slowdown
are contributing to uncertainty and higher market volatility.
She also pointed to the "sharp
deceleration" in the growth of global trade and the "rapid drop"
in commodity prices, which is damaging the finances of commodity-exporting
emerging market economies.
2 UK workers on minimum wage may double by 2020
(Larry Elliott in The Guardian) The number of employees earning the minimum
wage will double to more than 10% of the UK workforce by the end of this
parliament, according to new research.
A study published by the Resolution Foundation,
timed to coincide with the 20p an hour increase in the minimum wage, found that
the decision by George Osborne to lift the statutory pay floor through a
national living wage would result in a sharp increase in the numbers of people
having their wages set by the state.
The Resolution Foundation said only one in 50
employees were being paid the minimum wage after it was set at a cautiously low
level by Tony Blair’s government in 1999. In the years since, the number of
workers earning the minimum wage has risen to one in 20, but is now set to
increase to one in nine by 2020, or 3.2 million people.
Adam Corlett, the Resolution Foundation’s economic
analyst, said: “Over a million workers will get a welcome pay rise today as a
result of the latest increase in the minimum wage. “The new ambition shown by
the chancellor is welcome. But it will mean that around one in seven private
sector workers will have their pay directly set by government by 2020.”
3 2015 turning terrible year for investors (Wes
Goodman in Sydney Morning Herald) For investors around the world, 2015 is
turning into a year to forget. Stocks, commodities and currency funds are all
in the red, and even the measly gains in bonds are being wiped out by what
little inflation there is in the global economy.
Rounding out its steepest quarterly descent in four
years, the MSCI All Country World Index of shares is down 6.6 per cent in 2015
including dividends. The Bloomberg Commodity Index has slumped 16 per cent,
while a Parker Global Strategies index of currency funds dropped 1.8 per cent.
Fixed income has failed to offer much of a haven:
Bank of America's global debt index gained just 1 per cent, less than the 2.5
per cent increase in world consumer prices shown in an International Monetary
Fund index.
After three years in a virtuous cycle of rising
share prices and unprecedented monetary easing, markets are now sinking as
emerging economies from China to Brazil weaken and corporate profits slump.
Analysts have cut their global growth estimates for 2015 to 3 per cent from 3.5
per cent at the start of the year, and the turmoil has added pressure on
central banks to prolong their stimulus programs, with traders scaling back
forecasts for a Federal Reserve interest-rate increase by year-end.
Investors suffered the brunt of this year's losses
in the third quarter, with almost $11 trillion erased from stocks worldwide
over the past three months. China has been the biggest source of anxiety for
investors, after turmoil in the nation's financial markets fuelled concern that
the country's worst economic slowdown since 1990 was deepening.
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