1 UK explores free trade deal with China (Kamal
Ahmed on BBC) Chancellor Philip Hammond has begun discussions with China on an
ambitious free trade deal which could see greater access for major Chinese
banks and businesses to the UK economy.
The Chancellor said it was time to explore "new
opportunities" across the world, including with China, one of the UK's
biggest inward investors. That is despite a short term economic shock from
leaving the European Union. He added that the EU is not in "punishment
mode" over the Brexit vote.
"What we now need to do is get on with it in a
way that minimises the economic impact on the UK economy in the short term and
maximises the benefit in the long term," Mr Hammond said, admitting that
there had been "global disappointment" about the Brexit vote. Chinese
state media reported that the Chinese Ministry of Commerce wants to do a UK
free trade deal.
Mr Hammond has now revealed that Britain is also
keen. It will be the first time the UK has embarked on such a major project
with the second largest economy in the world. And will raise concerns about
cheap manufactured goods entering the UK more easily.
2 How hesitation is stifling global economy (Robert
Shiller in The Guardian) Economic slowdowns can often be characterised as
periods of hesitation. Consumers hesitate to buy a new house or car, thinking
that the old house or car will do just fine for a while longer.
So how does such behaviour become sufficiently
widespread to bring about an economic slump? Loss of economic confidence is one
possible cause. Uncertainty about economic policy is another possible source of
hesitation. If businesspeople don’t know what regulations, taxes, or worse,
nationalisations, will be coming, they may dither.
In a 2015 working paper, the economists Scott R
Baker, Nicholas Bloom, and Steven J. Davis constructed Economic Policy
Uncertainty (EPU) indices for a dozen countries using digital news archives.
The indices (covering Canada, China, France, Germany, India, Italy, Japan,
Russia, South Korea, Spain, the UK, and the US) were created by counting the
number of newspaper articles in each country and each month that had the
trifecta of terms economy (E), policy (P) and uncertainty (U).
They found that their EPU index foreshadows economic
contractions in the 12 countries, and that for the two countries with long-term
indices, the EPU values were high during the Great Depression. But do
contractions cause uncertainty, they ask, or does uncertainty cause
contractions? Given that we know that people are highly reactive to each other,
the causality most likely runs both ways, in a feedback loop.
The Brexit vote in the UK last month has been viewed
worldwide with extraordinary alarm as a signal of political instability. The
rising incidence of terrorism has added a vivid emotional edge to such
developments.
Will these fears fuel enough economic hesitation to
bring on another worldwide recession? Any answer at this time would be
impressionistic and imprecise. Given the importance of the consequences,
however, we should not shrink from considering how such fears are affecting
economic decision-making.
3 Jeep celebrates 75th anniversary
(Heather Leighton in San Francisco Chronicle) Jeep celebrated its 75th
anniversary for building military vehicles the only way a car brand knows how:
build an epic military-themed concept vehicle.
In 1941, Jeep made vehicles for the military, but
has slowly transformed itself to the commercial go-anywhere, do-anything
vehicles for civilians. And to celebrate the three-quarters of a century
anniversary, Jeep built a concept vehicle that is true to its rugged
beginnings.
The Wrangler 75th Salute concept vehicle pays
tribute to the brand's legendary history and military heritage. "We are
creating this unique Jeep Wrangler 75th Salute concept vehicle in celebration
of the brand's legendary history," said Mike Manley, head of Jeep Brand
FCA Global. "And to demonstrate that 75 years later, today's iconic Jeep
Wrangler is instantly recognizable and clearly connected to the original Willys
MB."
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