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| Trump plans $11bn tariffs aimed at EU's aircraft, cheese and wine – as it happened | |
| (32 minutes later) | |
| The International Monetary Fund has the jitters – with Brexit and trade tensions at the top of the agenda at its latest Washington meeting. | |
| It has downgraded growth forecasts around the world – notably in Germany and Italy – and warned that the global economy faces a “delicate moment”. | |
| The latest World Economic Outlook #WEO projects slowdown in growth in 2019 for 70% of the world economy. https://t.co/qSVoq5IxJr pic.twitter.com/TDmpp55zR1 | |
| Brexit is a key risk facing the global economy, the IMF said, with forecasts of a severe recession for the UK if it leaves the EU without a deal. | |
| However, the EU appears prepared to offer the UK a long extension of the Article 50 negotiation period until the end of 2019 in a bid precisely to avoid a no-deal Brexit, which the vast majority of economists think would be harmful for both the UK and the EU. | |
| Meanwhile, US President Donald Trump earlier underscored the fears expressed by the IMF that the global trading order is under threat. His administration has unveiled a package of tariffs on cheese, wine, and planes which would hit goods worth more than $11bn if implemented. | |
| Trump appeared to promise more in the way of aggro between the EU and the US. | |
| The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop! | |
| In London, Mike Ashley’s Sports Direct has finally been forced to give up on its efforts to snap up Debenhams. | |
| The ailing department store chain rejected Ashley’s advances, opting instead for a administration controlled by its lenders. Sports Direct also had to accept the loss of its entire stake in the business. | |
| And Standard Chartered has had to take a $1.1bn fine from the US over charges that it helped break sanctions against Iran. | |
| Thanks for reading today, and please do join Graeme Wearden tomorrow for a return to normal service on the business live blog. JJ | |
| Standard Chartered said it will pay a total of $947m (£726m) to US agencies and £102m to the UK’s Financial Conduct Authority. | Standard Chartered said it will pay a total of $947m (£726m) to US agencies and £102m to the UK’s Financial Conduct Authority. |
| The bank took a provision of only $900m in preparation in the fourth quarter of 2018, meaning it will need to take another charge of $190m in its accounts for the first quarter of 2019 to cover the rest. | The bank took a provision of only $900m in preparation in the fourth quarter of 2018, meaning it will need to take another charge of $190m in its accounts for the first quarter of 2019 to cover the rest. |
| Bill Winters, Standard Chartered’s chief executive, said: | Bill Winters, Standard Chartered’s chief executive, said: |
| We are pleased to have resolved these matters and to put these historical issues behind us. The circumstances that led to today’s resolutions are completely unacceptable and not representative of the Standard Chartered I am proud to lead today. | We are pleased to have resolved these matters and to put these historical issues behind us. The circumstances that led to today’s resolutions are completely unacceptable and not representative of the Standard Chartered I am proud to lead today. |
| Fighting financial crime is central to what we do and who we are; we do not tolerate misconduct or lax controls and we will continue to root out any issues that threaten the trust we have built over more than 160 years. | Fighting financial crime is central to what we do and who we are; we do not tolerate misconduct or lax controls and we will continue to root out any issues that threaten the trust we have built over more than 160 years. |
| Deferred prosecution agreements with the US Department of Justice and New York authorities have been extended for another two years until 2021, but the bank will no longer have to undergo compliance monitoring, Standard Chartered said. | Deferred prosecution agreements with the US Department of Justice and New York authorities have been extended for another two years until 2021, but the bank will no longer have to undergo compliance monitoring, Standard Chartered said. |
| The previous post has been corrected. Please refresh your page to view the updated post. | The previous post has been corrected. Please refresh your page to view the updated post. |
| Standard Chartered Bank has agreed a $1.1 billion (£840m) settlement with the US and British agencies over charges that it violated sanctions against Iran. | Standard Chartered Bank has agreed a $1.1 billion (£840m) settlement with the US and British agencies over charges that it violated sanctions against Iran. |
| The sanction busting transactions were worth $437m, the US Treasury’s Office of Foreign Assets Control (Ofac), which was one of multiple US agencies to fine Standard Chartered. | The sanction busting transactions were worth $437m, the US Treasury’s Office of Foreign Assets Control (Ofac), which was one of multiple US agencies to fine Standard Chartered. |
| London-headquartered Standard Chartered’s violations represented an “egregious case”, Ofac said in a statement. | London-headquartered Standard Chartered’s violations represented an “egregious case”, Ofac said in a statement. |
| From June 2009 until June 2014, SCB processed 9,335 transactions totaling $437,553,380 that were processed to or through the United States. All of these transactions involved persons or countries subject to comprehensive sanctions programs administered by OFAC. | From June 2009 until June 2014, SCB processed 9,335 transactions totaling $437,553,380 that were processed to or through the United States. All of these transactions involved persons or countries subject to comprehensive sanctions programs administered by OFAC. |
| This post has been changed to correct the total fine payable by Standard Chartered. The post previously said the total fine was $639m, which only related to one of the fines. | This post has been changed to correct the total fine payable by Standard Chartered. The post previously said the total fine was $639m, which only related to one of the fines. |
| The IMF has a useful chart to illustrate what it thinks will happen if there is a no-deal Brexit under two separate scenarios. | The IMF has a useful chart to illustrate what it thinks will happen if there is a no-deal Brexit under two separate scenarios. |
| The yellow line is the current forecast of relatively steady growth for the next few years (albeit slower than predicted before the EU referendum in 2016 – the green line). | The yellow line is the current forecast of relatively steady growth for the next few years (albeit slower than predicted before the EU referendum in 2016 – the green line). |
| The two scenarios for a no-deal Brexit, in which trade defaults to World Trade Organization terms, both show severe recessions in the UK. | The two scenarios for a no-deal Brexit, in which trade defaults to World Trade Organization terms, both show severe recessions in the UK. |
| The UK will lose about 3.5% of GDP by 2021 in the less severe scenario if the IMF’s predictions are proven correct. The EU will lose 0.5% of GDP over the same time period, the forecast said. | The UK will lose about 3.5% of GDP by 2021 in the less severe scenario if the IMF’s predictions are proven correct. The EU will lose 0.5% of GDP over the same time period, the forecast said. |
| The less severe scenario does not include significant delays to goods at the border. Under the more severe scenario the losses to GDP would be sharper in the short term, although the IMF said that the long-term effects will be similar in both scenarios. | The less severe scenario does not include significant delays to goods at the border. Under the more severe scenario the losses to GDP would be sharper in the short term, although the IMF said that the long-term effects will be similar in both scenarios. |
| US stock markets have fallen at the opening bell. | US stock markets have fallen at the opening bell. |
| The Nasdaq and the S&P 500 both lost 0.4% in early trading in New York, while the Dow Jones industrial average fell by 0.5%. | The Nasdaq and the S&P 500 both lost 0.4% in early trading in New York, while the Dow Jones industrial average fell by 0.5%. |
| Brexit uncertainty is a driver of the IMF’s 0.3% growth downgrade for the UK in 2019, and a 0.2% downgrade for 2020 growth, according to the Washington-based organisation’s chief economist. | Brexit uncertainty is a driver of the IMF’s 0.3% growth downgrade for the UK in 2019, and a 0.2% downgrade for 2020 growth, according to the Washington-based organisation’s chief economist. |
| “The situation is clearly in flux on a daily basis,” Gopinath said, speaking at a press conference following the release of the IMF’s outlook. | “The situation is clearly in flux on a daily basis,” Gopinath said, speaking at a press conference following the release of the IMF’s outlook. |
| However, Gopinath said that the uncertainty surrounding the future of UK-EU trade, with three days to go until the UK is scheduled to leave, was a key reason for a downgrade to the UK’s economic prospects. She said: | However, Gopinath said that the uncertainty surrounding the future of UK-EU trade, with three days to go until the UK is scheduled to leave, was a key reason for a downgrade to the UK’s economic prospects. She said: |
| We’ve seen the negative consequences of the uncertainty surrounding Brexit, which has weighed on investment. | We’ve seen the negative consequences of the uncertainty surrounding Brexit, which has weighed on investment. |
| The negative effects of a no-deal Brexit would be “substantial”, costing around 6% of the UK’s GDP, as well as having a big impact on the EU. | The negative effects of a no-deal Brexit would be “substantial”, costing around 6% of the UK’s GDP, as well as having a big impact on the EU. |
| It is not a positive outlook from the International Monetary Fund across the global economy. | It is not a positive outlook from the International Monetary Fund across the global economy. |
| Gita Gopinath, the IMF’s chief economist, said: | Gita Gopinath, the IMF’s chief economist, said: |
| While the global economy continues to grow at a reasonable rate and a global recession is not in the baseline projections, there are many downside risks. Tensions in trade policy could flare up again and play out in other areas, such as the auto industry, with large disruptions to global supply chains. | While the global economy continues to grow at a reasonable rate and a global recession is not in the baseline projections, there are many downside risks. Tensions in trade policy could flare up again and play out in other areas, such as the auto industry, with large disruptions to global supply chains. |
| Growth in systemic economies such as the euro area and China may surprise on the downside, and the risks surrounding Brexit remain heightened. | Growth in systemic economies such as the euro area and China may surprise on the downside, and the risks surrounding Brexit remain heightened. |
| A deterioration in market sentiment could rapidly tighten financing conditions in an environment of large private and public sector debt in many countries, including sovereign-bank ‘doom loop’ risks. | A deterioration in market sentiment could rapidly tighten financing conditions in an environment of large private and public sector debt in many countries, including sovereign-bank ‘doom loop’ risks. |
| Just released: April 2019 World Economic Outlook #WEO - Global growth has softened to 3.6 percent in 2018, is projected to decline further to 3.3 percent in 2019, and to return to 3.6 percent in 2020. https://t.co/HoSQZ4zkm7 pic.twitter.com/c1fElAK54u | Just released: April 2019 World Economic Outlook #WEO - Global growth has softened to 3.6 percent in 2018, is projected to decline further to 3.3 percent in 2019, and to return to 3.6 percent in 2020. https://t.co/HoSQZ4zkm7 pic.twitter.com/c1fElAK54u |
| Britain’s already struggling economy would be pushed into a two-year recession by a no-deal Brexit, the International Monetary Fund has warned. | Britain’s already struggling economy would be pushed into a two-year recession by a no-deal Brexit, the International Monetary Fund has warned. |
| Ahead of Theresa May’s plea to EU leaders for a further delay to Britain’s departure, the IMF used a downbeat half-yearly assessment of the global economy to predict that the UK economy could be 3.5% smaller than expected by 2021 if trade barriers were swiftly erected, Larry Elliott writes. | Ahead of Theresa May’s plea to EU leaders for a further delay to Britain’s departure, the IMF used a downbeat half-yearly assessment of the global economy to predict that the UK economy could be 3.5% smaller than expected by 2021 if trade barriers were swiftly erected, Larry Elliott writes. |
| The World Economic Outlook – completed in March before the latest developments in Brexit – predicted UK growth of 1.2% in 2019 on the assumption that a Brexit deal is done. | The World Economic Outlook – completed in March before the latest developments in Brexit – predicted UK growth of 1.2% in 2019 on the assumption that a Brexit deal is done. |
| IMF says no-deal Brexit risks two-year recession for UK | IMF says no-deal Brexit risks two-year recession for UK |
| Saudi Aramco, the state-owned oil producer which is often cited as the largest company in the world, has more than $100bn in orders for its first ever bond issue. | Saudi Aramco, the state-owned oil producer which is often cited as the largest company in the world, has more than $100bn in orders for its first ever bond issue. |
| Aramco is looking to raise $10bn from the sale, which is seen by many as a precursor to a previously delayed initial public offering. | Aramco is looking to raise $10bn from the sale, which is seen by many as a precursor to a previously delayed initial public offering. |
| Having made core earnings of $224bn last year and with $86bn in free cash flow at the end of 2018, Aramco does not need to borrow. | Having made core earnings of $224bn last year and with $86bn in free cash flow at the end of 2018, Aramco does not need to borrow. |
| A return to tensions in the US-EU relationship is part of the broader turn away from open world trade, say analysts at Deutsche Bank in a report published today on the German economy – one of those with the most to lose from car tariffs. | A return to tensions in the US-EU relationship is part of the broader turn away from open world trade, say analysts at Deutsche Bank in a report published today on the German economy – one of those with the most to lose from car tariffs. |
| World trade slowed considerably towards the end of 2018 and even shrank around the turn of the year, according to the report edited by Deutsche’s Stefan Schneider. | World trade slowed considerably towards the end of 2018 and even shrank around the turn of the year, according to the report edited by Deutsche’s Stefan Schneider. |
| It seems that German goods exports will stagnate or rise moderately at best during the first half of 2019. An increase by 2% in nominal terms would probably be a good result for 2019 as a whole. | It seems that German goods exports will stagnate or rise moderately at best during the first half of 2019. An increase by 2% in nominal terms would probably be a good result for 2019 as a whole. |
| World trade looks set to remain structurally weak in the foreseeable future. With protectionism becoming more and more popular in many countries, bilateral trade agreements appear the best option to secure free trade. | World trade looks set to remain structurally weak in the foreseeable future. With protectionism becoming more and more popular in many countries, bilateral trade agreements appear the best option to secure free trade. |
| Trump may be using the Airbus dispute as a way to up the ante ahead of a May decision on cars, according to Cailin Birch, global economist at the Economist Intelligence Unit. | Trump may be using the Airbus dispute as a way to up the ante ahead of a May decision on cars, according to Cailin Birch, global economist at the Economist Intelligence Unit. |
| That the US government would choose to act now, with little warning, in response to a fairly stale trade issue is very interesting. In our view, this shows that the US wants to pressure the EU to engage in meaningful trade talks, but without having to apply the more painful measure of automotive tariffs. | That the US government would choose to act now, with little warning, in response to a fairly stale trade issue is very interesting. In our view, this shows that the US wants to pressure the EU to engage in meaningful trade talks, but without having to apply the more painful measure of automotive tariffs. |
| The Trump administration has until mid-May to decide whether or not to act on the results of the 232 investigation [related to national security] into automotive imports. However, such a move would be equally damaging to automotive manufacturing and sales in the US, so the Trump administration may be trying to use the Airbus case as a way out. | The Trump administration has until mid-May to decide whether or not to act on the results of the 232 investigation [related to national security] into automotive imports. However, such a move would be equally damaging to automotive manufacturing and sales in the US, so the Trump administration may be trying to use the Airbus case as a way out. |
| Donald Trump has said that the “EU has taken advantage of the US on trade for many years”, in another ominous sign for the trade relationship. | Donald Trump has said that the “EU has taken advantage of the US on trade for many years”, in another ominous sign for the trade relationship. |
| The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop! | The World Trade Organization finds that the European Union subsidies to Airbus has adversely impacted the United States, which will now put Tariffs on $11 Billion of EU products! The EU has taken advantage of the U.S. on trade for many years. It will soon stop! |
| In July, Trump and the European commission president Jean-Claude Juncker appeared to have averted the possibility of a full-blown trade war, with a promise to work towards “zero tariffs”. | In July, Trump and the European commission president Jean-Claude Juncker appeared to have averted the possibility of a full-blown trade war, with a promise to work towards “zero tariffs”. |
| However, despite the warm words, many of the key concerns remain unresolved (see 8:59am). This is a particular concern around potential tariffs on car imports, which would represent a major escalation, targeting the EU’s industrial heartlands. | However, despite the warm words, many of the key concerns remain unresolved (see 8:59am). This is a particular concern around potential tariffs on car imports, which would represent a major escalation, targeting the EU’s industrial heartlands. |
| US stock market futures are pointing to a flat opening on Wall Street. | US stock market futures are pointing to a flat opening on Wall Street. |
| Futures for the Dow Jones industrial average fell by 0.06%, for the S&P 500 three-month futures fell by 0.1%, while Nasdaq futures declined by the same amount. | Futures for the Dow Jones industrial average fell by 0.06%, for the S&P 500 three-month futures fell by 0.1%, while Nasdaq futures declined by the same amount. |
| Britain is likely to be offered a final, long extension ending on 31 December after the EU’s chief negotiator, Michel Barnier, failed to convince the bloc’s capitals that Theresa May has a plan to break the Brexit impasse. | Britain is likely to be offered a final, long extension ending on 31 December after the EU’s chief negotiator, Michel Barnier, failed to convince the bloc’s capitals that Theresa May has a plan to break the Brexit impasse. |
| A number of member states, most prominently France, along with Slovenia, Greece, Austria and Spain, remain sceptical about a lengthy extension, citing the risks to the EU of Britain behaving badly, Daniel Boffey reports. | A number of member states, most prominently France, along with Slovenia, Greece, Austria and Spain, remain sceptical about a lengthy extension, citing the risks to the EU of Britain behaving badly, Daniel Boffey reports. |
| Barnier tried to push for a shorter extension to keep pressure on MPs to back May’s deal, according to a leaked note on discussions. The full story is here: | Barnier tried to push for a shorter extension to keep pressure on MPs to back May’s deal, according to a leaked note on discussions. The full story is here: |
| UK likely to be offered Brexit extension until end of year | UK likely to be offered Brexit extension until end of year |
| After early worries about the potential impact of Trump’s tariffs, European stocks have recovered on the major stock indices as we reach the halfway point in London trading. | After early worries about the potential impact of Trump’s tariffs, European stocks have recovered on the major stock indices as we reach the halfway point in London trading. |
| The FTSE 100 is up by 0.1% at 7,459 points, although the mid-cap FTSE 250 is faring slightly worse, down by 0.2%. | The FTSE 100 is up by 0.1% at 7,459 points, although the mid-cap FTSE 250 is faring slightly worse, down by 0.2%. |
| Sterling is flat against the euro, and up by 0.2% against the US dollar. | Sterling is flat against the euro, and up by 0.2% against the US dollar. |