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You can find the current article at its original source at http://www.theguardian.com/business/live/2016/apr/28/sajid-javid-mps-steel-crisis-japan-markets-us-gdp-greece-live
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| Version 9 | Version 10 |
|---|---|
| US GDP: growth slows sharply as business spending slumps - live updates | |
| (35 minutes later) | |
| 2.09pm BST | |
| 14:09 | |
| This is the third year running in which US growth has been alarmingly weak in the January-March quarter. | |
| US Q1 GDP +0.5%. That's annualized, so economy virtually ground to a halt. GDP trend pretty clear in last two years: pic.twitter.com/xYVAAnHcmp | |
| 2.05pm BST | |
| 14:05 | |
| Weak growth = no June rate hike | |
| There’s no chance of the US central bank raising interest rates while growth is so weak, argues Tom Floyd of Foenix Partners. | |
| According to Floyd, Americans can stop worrying that interest rates might rise in June. | |
| Despite the Fed’s best efforts to leave the door open for a hike at the next meeting, today’s GDP data risks blowing it firmly shut. The data, showing a rise of just 0.5% in the first quarter versus expectations of a rise of 0.7%, undermines the more hawkish Fed tone from last night and does little to justify an imminent raise. | |
| Although the Fed dropped language acknowledging global risks it is worth noting the next meeting is only 8 days before the next major global risk event, the Brexit vote. | |
| In light of the soft data and the looming referendum, a June hike is looking increasingly unlikely with Janet Yellen’s attempts to convince markets to the contrary becoming largely futile. Traders will remain rightly sceptical. | |
| 1.57pm BST | |
| 13:57 | |
| Nancy Curtin, Chief Investment Officer at Close Brothers Asset Management, is also concerned by the slowdown in US growth: | |
| “The US economy hasn’t run aground by any means, but it is navigating more difficult domestic waters than three months ago. Growth has been weighed down by weak performances in the manufacturing and energy sectors due to the strong dollar and volatile oil prices. On top of this, consumer confidence has been knocked recently, impacting retail sales. | |
| “Although today’s results clearly indicate a slowdown in growth, it’s important to remember that the US economy has still expanded. The labour market is in reasonably good shape, and global risks seem to be slightly more muted than at the start of the year. This will help support domestic momentum as the year progresses. | |
| 1.57pm BST | |
| 13:57 | |
| Paul Sommerville of Sommerville Advisory Markets says an annualised growth rate of 0.5% is ‘woeful’. | |
| 1.50pm BST | |
| 13:50 | |
| This is America’s weakest quarterly growth rate in almost two years: | |
| Q1 keeps up its 'low-growth' reputation. US #GDP growth in Q1 +0.5% annualized, below expectations. pic.twitter.com/K87sDaTR40 | |
| And while consumer spending is up, exports and business spending have fallen - suggesting the US recovery is uneven, as well as weak. | |
| Updated | |
| at 1.54pm BST | |
| 1.36pm BST | |
| 13:36 | |
| US economy almost stalls | |
| Breaking news from America: The US economy has barely grown at all in the last three months. | |
| US GDP expanded by 0.5%, on an annualised basis, according to the US commerce department. | |
| That’s a quarterly growth rate of just 0.125% - a very measly outcome - and weaker than the 0.4% which Britain reported yesterday. | |
| Although consumer spending rose by 1.9%, business investment tumbled by 5.9%, suggesting corporations cut back sharply. | |
| U.S. GDP +0.5%. Business spending down 5.9%, the biggest drop since the waning days of the recession. | |
| 1.08pm BST | 1.08pm BST |
| 13:08 | 13:08 |
| Here’s Graham Ruddick’s early story about this morning’s session, in which Tata Steel’s UK boss warned of ‘disaster’ looming unless a deal is reached. | Here’s Graham Ruddick’s early story about this morning’s session, in which Tata Steel’s UK boss warned of ‘disaster’ looming unless a deal is reached. |
| Related: Tata Steel UK boss warns of pension timebomb if buyer not found | Related: Tata Steel UK boss warns of pension timebomb if buyer not found |
| 12.30pm BST | 12.30pm BST |
| 12:30 | 12:30 |
| Sajid Javid's testimony: What we learned | Sajid Javid's testimony: What we learned |
| Sajid Javid has been spoken of as a future prime minister. Even Forbes Magazine got in on the act, saying it would be a cheering rags-to-riches story if Javid got the keys to Number 10. | Sajid Javid has been spoken of as a future prime minister. Even Forbes Magazine got in on the act, saying it would be a cheering rags-to-riches story if Javid got the keys to Number 10. |
| But his hopes of a glittering career are now tightly bound with the future of Britain’s steel industry. Today’s session showed us that: | But his hopes of a glittering career are now tightly bound with the future of Britain’s steel industry. Today’s session showed us that: |
| 1) Javid regrets that fateful trip to Australia. | 1) Javid regrets that fateful trip to Australia. |
| He freely admitted that, with hindsight, he should have flown to Mumbai last month as Tata’s board decided what to do with its UK steel plants. | He freely admitted that, with hindsight, he should have flown to Mumbai last month as Tata’s board decided what to do with its UK steel plants. |
| He also insists it wouldn’t have done any good, as his department has been working behind the scenes since February. But we’ll never know if Tata might have softened the tone of its announcement, if Javid had been banging on the boardroom door promising to do whatever it took to keep the mills running. | He also insists it wouldn’t have done any good, as his department has been working behind the scenes since February. But we’ll never know if Tata might have softened the tone of its announcement, if Javid had been banging on the boardroom door promising to do whatever it took to keep the mills running. |
| Javid failed to shake off the impression that the government was caught out by Tata’s decision - suggesting it didn’t actually have a full grip on the crisis. | Javid failed to shake off the impression that the government was caught out by Tata’s decision - suggesting it didn’t actually have a full grip on the crisis. |
| And if Port Talbot closes, Javid may go down in political history as the man who took his teenage daughter on a jolly to Australia as the steel industry burned. Harsh game, politics. | And if Port Talbot closes, Javid may go down in political history as the man who took his teenage daughter on a jolly to Australia as the steel industry burned. Harsh game, politics. |
| 2) It’s all about the pensions. | 2) It’s all about the pensions. |
| Javid agreed with Tata’s Steel UK SEO Bimlendra Jha that the pension liabilities are crucial. | Javid agreed with Tata’s Steel UK SEO Bimlendra Jha that the pension liabilities are crucial. |
| Several potential buyers have already said they wouldn’t take them on, so Tata and the government need to find a way of resolving the £15bn scheme, and its deficit. | Several potential buyers have already said they wouldn’t take them on, so Tata and the government need to find a way of resolving the £15bn scheme, and its deficit. |
| Javid claims that Tata’s pension scheme is not a ‘major risk’ to taxpayers. But that’s not the same as saying taxpayers won’t pay a penny.... | Javid claims that Tata’s pension scheme is not a ‘major risk’ to taxpayers. But that’s not the same as saying taxpayers won’t pay a penny.... |
| And don’t forget that Jha warned of economic and social disaster if the pension problem isn’t dealt with... | And don’t forget that Jha warned of economic and social disaster if the pension problem isn’t dealt with... |
| 3) The government won’t own more than 25% of British steel. | 3) The government won’t own more than 25% of British steel. |
| Javid is committed to taking a 25% stake in Tata UK, if it helps find a buyer. But that’s his limit - anything more would, in his view, be counterproductive. That’s a typically Thatcherite view, and means full nationalisation isn’t on the cards. | Javid is committed to taking a 25% stake in Tata UK, if it helps find a buyer. But that’s his limit - anything more would, in his view, be counterproductive. That’s a typically Thatcherite view, and means full nationalisation isn’t on the cards. |
| Updated | Updated |
| at 12.33pm BST | at 12.33pm BST |
| 11.58am BST | 11.58am BST |
| 11:58 | 11:58 |
| Q: Finally, what can you do to reassure customers and suppliers to keep working with Tata steel at this time? | Q: Finally, what can you do to reassure customers and suppliers to keep working with Tata steel at this time? |
| Sajid Javid says he has already written to all Tata’s customers and suppliers, and contacted the largest ones directly. | Sajid Javid says he has already written to all Tata’s customers and suppliers, and contacted the largest ones directly. |
| He has also asked Tata to give similar reassurances. | He has also asked Tata to give similar reassurances. |
| But the biggest comfort I can give is the action that we are prepared to take, and how far we will go to get a deal. | But the biggest comfort I can give is the action that we are prepared to take, and how far we will go to get a deal. |
| That means customers and suppliers can look at this and say ‘this business has a long-term future’. | That means customers and suppliers can look at this and say ‘this business has a long-term future’. |
| It’s an ongoing process too - we need to keep reassuring people. | It’s an ongoing process too - we need to keep reassuring people. |
| Javid concludes the session by insisting that the government is doing everything it can, along with other partners such as the Welsh government and unions. | Javid concludes the session by insisting that the government is doing everything it can, along with other partners such as the Welsh government and unions. |
| The Community union couldn’t be more helpful if it tried, he concludes. | The Community union couldn’t be more helpful if it tried, he concludes. |
| That’s the end of the session. | That’s the end of the session. |
| 11.53am BST | 11.53am BST |
| 11:53 | 11:53 |
| Javid: We want a quick deal | Javid: We want a quick deal |
| Q: If a potential buyer says it needs nine months to agree a deal, but Tata insist on a quick deal, would you step in with a bridging loan? | Q: If a potential buyer says it needs nine months to agree a deal, but Tata insist on a quick deal, would you step in with a bridging loan? |
| I’m not going to rule anything out, Javid replies, but the focus is to find a commercial operator quickly. | I’m not going to rule anything out, Javid replies, but the focus is to find a commercial operator quickly. |
| A nine-month process isn’t in anyone’s interest. | A nine-month process isn’t in anyone’s interest. |
| Q: You have offered to take a 25% stake in Tata UK. Is that your maximum limit? | Q: You have offered to take a 25% stake in Tata UK. Is that your maximum limit? |
| Javid says his offer of 25% co-ownership was designed to show potential buyers that he’s serious about getting a deal. | Javid says his offer of 25% co-ownership was designed to show potential buyers that he’s serious about getting a deal. |
| But the 25% figure is important - if you go over that, the government would be a significant shareholder, and too closely involved. | But the 25% figure is important - if you go over that, the government would be a significant shareholder, and too closely involved. |
| Q: How long would you be prepared to hold this stake before looking to exit? | Q: How long would you be prepared to hold this stake before looking to exit? |
| Javid says it’s too early to say. | Javid says it’s too early to say. |
| 11.49am BST | 11.49am BST |
| 11:49 | 11:49 |
| Q: Unions have told us they would favour scrapping the lesser duty rule, in favour of a new solution just for the steel sector. Is this under consideration? | Q: Unions have told us they would favour scrapping the lesser duty rule, in favour of a new solution just for the steel sector. Is this under consideration? |
| Javid says he still supports the lesser duty rule [this is the rule that prevents higher tariffs being imposed on Chinese steel] | Javid says he still supports the lesser duty rule [this is the rule that prevents higher tariffs being imposed on Chinese steel] |
| The lesser duty rule works, Javid insists. Its intention is to stop dumping or provide compensation. | The lesser duty rule works, Javid insists. Its intention is to stop dumping or provide compensation. |
| If we scrapped it, we would have spent an extra £500m on the solar industry for example [because the lesser duty rule covers a range of industries, not just steel] | If we scrapped it, we would have spent an extra £500m on the solar industry for example [because the lesser duty rule covers a range of industries, not just steel] |
| Q: Do you believe Tata are a responsible seller, given they didn’t fully brief you about their plans for a quick sale? | Q: Do you believe Tata are a responsible seller, given they didn’t fully brief you about their plans for a quick sale? |
| Yes, Javid replies, based on the conversations I’d had with them. They have approached this issue responsibly. | Yes, Javid replies, based on the conversations I’d had with them. They have approached this issue responsibly. |
| Q: Is there timeline appropriate? They are talking about finding a buyer within weeks, but this will take months. | Q: Is there timeline appropriate? They are talking about finding a buyer within weeks, but this will take months. |
| Tata are losing money every day, so they can’t have unlimited time. But it is important that they do everything possible to find a responsible buyer. | Tata are losing money every day, so they can’t have unlimited time. But it is important that they do everything possible to find a responsible buyer. |
| I have every reason to believe that when they promise to be responsible, that will be reflected in the timeline, Javid hints. | I have every reason to believe that when they promise to be responsible, that will be reflected in the timeline, Javid hints. |
| 11.41am BST | 11.41am BST |
| 11:41 | 11:41 |
| MPs are questioning whether Sajid Javid is really doing enough to help the steel industry. | MPs are questioning whether Sajid Javid is really doing enough to help the steel industry. |
| I will do everything in my power to help, but I cannot influence the price of steel, says Javid | I will do everything in my power to help, but I cannot influence the price of steel, says Javid |
| Q: But what about tariffs? Should the EU move faster to identify problems? | Q: But what about tariffs? Should the EU move faster to identify problems? |
| Speed of action is an issue, Javid replies -- that’s why I called a meeting last year to look at the issue of dumping. Europe must move faster. | Speed of action is an issue, Javid replies -- that’s why I called a meeting last year to look at the issue of dumping. Europe must move faster. |
| Reminder: Javid actually blocked a measure to impose higher tariffs on Chinese steel imports.... | Reminder: Javid actually blocked a measure to impose higher tariffs on Chinese steel imports.... |
| Javid wants speed of action in trade defence and tariffs?! Why was he blocking tariff increases at an EU council level then? | Javid wants speed of action in trade defence and tariffs?! Why was he blocking tariff increases at an EU council level then? |
| But the business secretary is adamant that tariffs can work. Take wire rod imports - they have gone from 67,000 tonnes to zero. | But the business secretary is adamant that tariffs can work. Take wire rod imports - they have gone from 67,000 tonnes to zero. |