UK economy stalls as Brexit, political worries hit manufacturing output

A Bank of England policymaker, Gertjan Vlieghe, hinted at a potential vote in favor of a January cut to the BoE’s main interest rate. (AFP)
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Updated 13 January 2020

UK economy stalls as Brexit, political worries hit manufacturing output

  • UK’s monetary policy committee looking at the merits of near-term stimulus
  • Britain’s parliament last week finally approved Brexit, ending years of arguments that toppled two UK governments

LONDON: Britain’s economy has stalled, official data showed Monday, as Brexit and political uncertainty contributed to slashing manufacturing output, heaping pressure on the Bank of England to cut interest rates.
Gross domestic product contracted 0.3 percent in November, the Office for National Statistics said in a statement. It grew only 0.1 percent in the three months to the end of November, the ONS added.
Manufacturing meanwhile slumped 1.7 percent in November.
Speaking ahead of the data a Bank of England policymaker, Gertjan Vlieghe, hinted at a potential vote in favor of a January cut to the BoE’s main interest rate, weighing on the pound Monday.
It followed comments Friday by fellow policymaker Silvana Tenreyro, who said she could support a rate cut from the current 0.75-percent level, if the economy did not strengthen.
And on Thursday, the bank’s outgoing governor, Mark Carney, said the monetary policy committee was looking at the merits of near-term stimulus.
As for the latest GDP data, “a poor performance in November was always on the cards given that the uncertainties facing the economy were at a peak with the general election looming and doubts over what would happen on the Brexit front after it had been delayed again from 31 October,” noted Howard Archer, chief economic adviser to financial researchers EY ITEM Club.
“It is clear that businesses were cautious in their behavior while it also appears that consumers were reluctant to spend.”
British Prime Minister Boris Johnson’s Conservatives convincingly won a general election in December that has broken the deadlock over the UK’s departure from the European Union.
Britain’s parliament last week finally approved Brexit, ending years of arguments that toppled two UK governments.
“We expect the economy to get a lift in the early months of 2020 from a more settled domestic political environment following the Conservatives substantial win... and an easing of near-term Brexit uncertainties as the UK leaves the EU with Johnson’s deal on 31 January,” said Archer.


Turkish Airlines may delay delivery of Airbus, Boeing planes

Updated 27 May 2020

Turkish Airlines may delay delivery of Airbus, Boeing planes

  • The carrier plans to begin some domestic flights on June 4 and international on June 10
  • Airlines chairman said the impact of the coronavirus on market could last up to five years

ISTANBUL: Turkish Airlines, which halted nearly all of its passenger flights as a result of the coronavirus crisis, may delay the delivery of some Boeing and Airbus planes, its chairman was quoted as saying on Wednesday.
The carrier plans to begin some domestic flights on June 4 and some international flights on June 10 as airlines worldwide try to get planes flying again after a global travel slump.
But Turkish Airlines chairman Ilker Ayci said in an interview with Turkey’s Hurriyet newspaper that the impact of the coronavirus could last up to five years and that it would take a while to reach 2019 load factor levels.
Turkish Airlines had received half of its order for 25 Boeing 787-9 planes, he said, adding that the delivery of the rest could be delayed.
The airline is in talks to take delivery of Airbus 350-900s that are ready from an order of 25, and that it was working to delay the delivery of the rest, he said.
“We are trying to lighten the serious loads that could arise. We are getting our narrow-body planes.”
Ayci said Turkish Airlines would no longer offer free in-flight food and drinks on domestic flights and other flights shorter than two hours.
He also repeated that the company would try to maintain employment, but that salaries would have to be adjusted, with the aim of supporting those paid the least.