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Business news live - UK at risk of 'unnecessarily painful recession' after Brexit because of bad economic policy

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Ben Chapman
Monday 09 September 2019 08:30
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What happens next with Brexit

The UK faces an “unnecessarily painful” recession thanks to policies pursued by the government and Bank of England, according to a report.

Data out today suggests that the economy may avoid a recession this quarter but growth remains subdued. Low interest rates mean the UK's ability to absorb the shock of a downturn is “blunted”, the Resolution Foundation said

UK household families are already more vulnerable to the impact of a downturn because they have run down their savings while the social safety net has been significantly eroded during years of austerity, the think tank said.

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Recession fears grow

Welcome to The Independent's live coverage of global business and economic events. 

This morning has seen more warnings of the threats to the UK economy. KPMG says a no-deal Brexit will tip the country into recession.

The Resolution Foundation warns that the risk of recession is at its highest since 2007 but low interest rates mean the UK's ability to absorb any shock is “blunted”.

UK household families are already more vulnerable to the impact of a downturn because they have run down their savings while the social safety net has been significantly eroded during years of austerity, the think tank says.

ben.chapman9 September 2019 09:21
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Lloyds faces extra £1.8bn of PPI costs after last-minute surge in claims

A last-minute surge in PPI claims has left Lloyds banking group with up to £1.8bn added to its bill for the scandal.

The lender said it saw a "significant spike" in claims prior to the final 29 August deadline.

Lloyds had set aside an extra £1.1bn but said today that figure will have to rise.

A number of banks experienced a jump in claims immediately before the deadline, raising questions about how many consumers may still be owed redress but will now be barred from obtaining it.

ben.chapman9 September 2019 09:31
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Hundreds of BA flights carrying 200,000 passengers cancelled

British Airways has shut down the vast majority of its operation because of a pilots' strike, Simon Calder reports.

Flight crew who belong to the British Airline Pilots’ Association (Balpa) are engaged in a bitter pay dispute with BA. They have gone on strike for 48 hours, triggering the cancellation of almost all the airline’s 1,700 flights to and from Heathrow and Gatwick on Monday and Tuesday.

The travel plans of around 200,000 passengers have been disrupted.

For full details:

ben.chapman9 September 2019 09:37
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Trucking firm subject to takeover bid

Eddie Stobart Logistics is being lined up for a possible takeover, less than a month after shares were suspended and the chief executive was shown the door.

The haulage company confirmed that DBAY Advisors, which already has a 10 per cent stake in the business, has received an "expression of interest".

It means the suitors now have until 5pm on 7 October to either table a formal bid, or walk away, under stock market rules.

Press Association

ben.chapman9 September 2019 09:40
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UK posts solid July growth of 0.3%

Despite warnings of an impending recession, the UK economy grew at its fastest pace in six months in July, official data shows.

The economy expanded 0.3 per cent in July and was unchanged over the May to July quarter, the Office for National Statistics said.

The ONS' Rob Kent-Smith said:

“GDP growth was flat in the latest three months, with falls in construction and manufacturing.

“While the largest part of the economy, services sector, returned to growth in the month of July, the underlying picture shows services growth weakening through 2019.

"The trade deficit narrowed due to falling imports, particularly unspecified goods (including non-monetary gold), chemicals and road vehicles in the three months to July.”

ben.chapman9 September 2019 09:56
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UK services sector shows 'subdued growth'

The dominant services sector, which makes up more than three-quarters of the economy, continued to show "subdued growth" in the three months to July 2019, growing by 0.2 per cent.

A number of industries have been driving this decline, including administration and support services, human health activities, education, real estate, and transportation and storage, the ONS said.

Information and communication, on the other hand, driven by computer programming, continued to do well throughout this period.

ben.chapman9 September 2019 10:02
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The pound has been given a slight boost by better-than-expected economic growth in July.

Sterling is up 0.16 per cent against the dollar to $1.2302 and has erased most of its losses from this morning against the euro.

ben.chapman9 September 2019 10:04
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Co-op and Camelot accused of collusion over scratchcard sales

The Co-op and National Lottery operator Camelot have been accused of "colluding" to restrict competition by a rival scratchcard firm.

Charitable lottery business Nektr said it will be taking both companies to the competition watchdog after it claimed its own displays were stripped from Co-op stores by its competitor, allegedly breaching its own contract with the retailer.

Craig Scott, co-founder of Nektr, said its dispute with the companies has cost it £1.5 million and "effectively killed the business".

Nektr said it is taking the companies to court for damages in relation to the losses it suffered following the alleged "anti-competitive collusion".

Press Association

ben.chapman9 September 2019 10:15
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'A reassuring sign'

"The pick-up in GDP in July is a reassuring sign that the economy is on course to grow at a solid—perhaps even above-trend—rate in Q3," says Samuel Tombs, chief UK economist at Pantheon Macroeconomics.

He suggests that services growth was not the result of any one-off stimuli but rather broad-based strength.

A 0.3 per cent month-to-month rise in manufacturing may have been due to firms starting to stockpile again in preparation for Brexit, Tombs says.

ben.chapman9 September 2019 10:31
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PwC's chief economist John Hawksworth says the UK economy should avoid a technical recession this quarter but future growth depends on avoiding a disorderly Brexit.

“Looking ahead, much depends on the outcome on Brexit. If a reasonably smooth exit from the EU can be achieved, then we remain optimistic that UK growth could bounce back to over 1 per cent next year as business investment recovers and public spending picks up in line with the plans announced by the Chancellor last week. 

"But if there is a disorderly Brexit, the UK economy could be tipped into recession. And if there is a prolonged period of political limbo with no clear resolution of the Brexit issue, then businesses could continue to defer major investment decisions, causing the UK economy to continue to stall."

ben.chapman9 September 2019 10:58

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