Archive for the ‘Brown’ Category

No Economic Recovery Before 2011

October 20, 2008

By Harry Wallop and Edmund Conway
Telegraph (UK)
Consumer spending, which has been one of the main drivers of the Gordon Brown’s decade of boom, will collapse by the end of the year and not return to fully-positive territory until 2011, according to the Ernst & Young Item Club.

The report, which also predicts another 500,000 people will lose their jobs, provides a clear illustration of how the turmoil in the financial sector has spread “like a pandemic” from the City to “every part” of the lives of ordinary families.

It comes just days ahead of official figures showing that the economy is now in the early stages of a full-blown recession.

The Item Club, an influential forecasting house, predicts that consumer expenditure – on everything from food, clothes, holidays, household bills, home improvements and entertainment – will fall by 1.2 per cent in 2009, and increase by just 0.2 per cent in 2010 before growing by 1.9 per cent in 2011.

This compares to an average annual growth of 3.5 per cent over the last decade.

The report is the most gloomy assessment yet of how the impending recession will hit householders, with consumer expenditure the benchmark of how well or badly people are coping with economic pressures.

Professor Peter Spencer, the report’s author, said: “The way the virus is spreading is like a pandemic. It’s not just spreading from New York across the Atlantic. It is also spreading from the City to the real economy.

“The people who will really be squeezed are younger families with children who are finding it difficult to keep hold of their job – and dare I say it – their homes.”

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Worst Economic Slump Since Great Depression

By Edmund Conway
The Telegraph
The warning underlines the fact that policymakers have failed to prevent the financial crisis from turning into a full-blown economic slump. It comes as world leaders agreed to hold a summit in New York billed as the “Bretton Woods meeting for the 21st century”.

In its major assessment of the global economy’s health, Deutsche Bank also warned that Britain is even more vulnerable than the US or the euro area, as it predicted that the powerhouses of India and China would fail to support the wider global economy through the downturn.

The banks’ economists Thomas Mayer and Peter Hooper said: “We now expect a major recession for the world economy over the year ahead, with growth in the industrial countries falling to its lowest level since the Great Depression and global growth falling to 1.2pc, its lowest level since the severe downturn of the early 1980s.”

According to the International Monetary Fund, global growth of anything less than 3pc constitutes a world recession. The warning was echoed by Richard Berner of Morgan Stanley, who said: “A global recession is now under way, and risks are still pointed to the downside for commodity prices and earnings.”

The forecasts came as President George W Bush called a summit of the Group of Eight leading economies for the weeks after the US Presidential Election in order to organise a concerted response to the economic downturn.

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Bush: Iran Still Dangerous

December 4, 2007

At a morning press conference today, President Bush said Iran was dangerous before the NIE and Iran remains dangerous.

“Nothing has changed,” the President said.

Don’t let Iran off the hook just yet

By Angela Charlton, Associated Press 

PARIS – Don’t let Iran off the hook quite yet.

That’s the message European and U.N. officials are sending after a U.S. intelligence report concluded Iran is not building nuclear weapons.

Europeans say the U.S. U-turn strengthens their argument for negotiations with Tehran. But they also said that sanctions are still an option to compel Iran to be fully transparent about its nuclear program.

The report, a composite of findings from several U.S. intelligence agencies released Monday, said Iran halted nuclear weapons development in 2003; a stunning reversal for an administration whose conviction that Iran was seeking nuclear arms has driven two rounds of U.N. sanctions and stoked worldwide proliferation fears.

European officials, eager not to appear thrown off balance by the surprising report, insisted that the international community should not walk away from years of talks with an often defiant Tehran that is openly enriching uranium for uncertain ends. The report said Iran could still build a nuclear bomb by 2010-15.

“We must maintain pressure on Iran,” said French Foreign Ministry spokeswoman Pascale Andreani, whose country has taken an increasingly tough stance against Iran in recent months.

She said France would pursue a new U.N. resolution with “constraining measures” against Iran over its refusal to comply with international obligations. A tougher stance on Iran was a campaign promise of French President Nicolas Sarkozy, elected in May.

The EU’s foreign policy chief, Javier Solana, has led Europe‘s push to get Tehran to suspend uranium enrichment; an effort that will not be derailed by the U.S. report, said an EU official who spoke on condition of anonymity because of the sensitivity of the issue.

“It’s very important for us not to say, ‘Oh thanks for that, this whole thing is over now.’ It isn’t over. Iran is still in defiance of the U.N. Security Council and the Nonproliferation Treaty,” said William Hague, foreign affairs spokesman for Britain’s opposition Conservative Party.

British Prime Minister Gordon Brown‘s spokesman Michael Allam said, “The report confirms we were right to be worried about Iran seeking to develop nuclear weapons. It also shows that the sanctions program and international pressure has had some effect.”

The report may relieve European fears about a possible U.S. move toward war in Iran. Sarkozy has evoked the risk of “a catastrophic alternative: an Iranian bomb, or the bombing of Iran” if diplomacy and sanctions fail.

“Those who believe dealing with Iran can only be done through a military attack are weakened,” said Yossi Mekelberg, a Middle East expert at Chatham House, an international affairs think tank in London.

The report was a vindication for the U.N. nuclear watchdog, the International Atomic Energy Agency, which has been criticized as too cautious on Iran.

IAEA Director General Mohamed ElBaradei said the report “should help defuse the current crisis,” the agency said in a statement.

“The estimate tallies with the agency’s consistent statements over the last few years,” it said. The IAEA urged further negotiations on the future of Iran’s nuclear program.

Despite the continued talk of sanctions, the viability of a new U.N. resolution was uncertain in the face of the new report. After high-level talks in Paris on Saturday, world powers predicted a third U.N. sanctions resolution within weeks.

The United States, Britain and France have been leading a push for more sanctions, while Russia and China, the other two veto-wielding members of the U.N. Security Council, have been less enthusiastic.

China’s Foreign Ministry would not say Tuesday whether the new report could undercut the case for sanctions or whether Beijing would support new measures against Tehran.

Ministry spokesman Qin Gang instead reiterated China’s standard position of using “diplomatic negotiations first” and said China hopes that “Iran can earnestly fulfill the U.N. Security Council resolutions and carry out comprehensive cooperation with the IAEA and make clarifications on relevant issues.”

Francois Gere, an Iran specialist and head of the French Institute of Strategic Analysis, said the report would have more impact on U.S. politics and strategy than in Europe.

“Europeans were, and remain, in a logic of diplomacy,” he said.