Sterling losses deepen to drop by 1% on Johnson’s Brexit remarks

Sterling losses deepen to drop  by 1% on Johnson’s Brexit remarks
A man wearing an EU flag-themed beret and carrying an EU flag is seen on Whitehall in central London on Friday. (AFP)
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Updated 12 December 2020

Sterling losses deepen to drop by 1% on Johnson’s Brexit remarks

Sterling losses deepen to drop  by 1% on Johnson’s Brexit remarks
  • British PM said chances of UK securing a Brexit trade deal with EU looked to be fading

LONDON: The British pound extended losses Friday to drop more than 1 percent against the dollar after Prime Minister Boris Johnson warned that a no-deal Brexit was “very, very likely.”

The pound slumped by 1.2 percent to hit $1.3135, the lowest level since mid November, while the euro rose by 1 percent to 92.20 pence — its the highest since September.
Johnson said the chances of Britain securing a Brexit trade deal with the EU looked to be fading, as a deadline approached on whether to keep talking.
The prime minister said he had not seen “a big offer, a big change” in the EU offer on fishing and fair competition rules, making a no-deal outcome “very, very likely” under which Britain would trade on terms established by the World Trade Organization. The news sent the pound tumbling further to extend Thursday’s steep losses. “Already down sharply on the day, Johnson’s latest warning pushed the pound below $1.3150 ... while the euro extended its advance,” ThinkMarkets analyst Fawad Razaqzada told AFP. “It looks like traders are taking no chances now as the weekend approaches.
“We may see an acceleration in selling toward the close as more (dealers) exit their trades amid fears the pound could gap lower at the Asian open on Sunday night” in Britain.
CMC Markets analyst David Madden noted that the relationship between Brussels and London appeared to have deteriorated quickly over the last 24 hours.
“The UK-EU relationship has gone from bad to worse in the past 24 hours — and that goes for sterling too,” Madden said.
“Traders are turning their back on the pound as the language being used now is more serious and a fears of a no-deal have increased considerably.
“Adding to the mix is the fact that we are approaching the weekend, and it seems that some traders are keen to and run with respect to the pound.”
EU chief Ursula von der Leyen has told the bloc’s leaders there were “low expectations” a deal could be struck with Britain, EU sources said.
Europe’s stock markets also slumped Friday as a no-deal Brexit became a stronger possibility.

FASTFACTS

● PM Boris Johnson said he had not seen ‘a big offer, a big change’ in the EU offer on fishing and fair competition rules, making a no-deal outcome ‘very, very likely’ under which Britain would trade on terms established by the WTO.

● EU chief Ursula von der Leyen has told the bloc’s leaders there were ‘low expectations’ a deal could be struck with Britain, EU sources said.

● Europe’s stock markets also slumped Friday as a no-deal Brexit became a stronger possibility.

“In the past few weeks, the market consensus has gone from being reasonably confident that the EU and the UK would agree on a skinny deal — to fearing that no deal may now be the mostly likely outcome,” Rabobank analyst Jane Foley told AFP.
Meanwhile, the Bank of England took steps on Friday to keep banks lending through 2021.
Governor Andrew Bailey said the central bank had done all it could to mitigate risks from a no-deal departure from the EU, and it was ready to deal with any disruptions to financial markets.
“What has the Bank of England got in its armory, as it were? The answer is a lot. We will use our tools, as we did in March, should we be in that situation,” Bailey told a news conference.
The BoE ramped up market liquidity auctions at the start of the pandemic, as well as cutting interest rates to a record low and restarting its asset-purchase program.
Market disruptions would not threaten financial stability, but Bailey warned that some EU customers might be unable to access British financial services because the EU had not taken mitigating action. “There is a limit to what we can do,” Bailey said.


Saudi Arabia meeting water scarcity challenge with innovation

Saudi Arabia meeting water scarcity challenge with innovation
Updated 25 January 2021

Saudi Arabia meeting water scarcity challenge with innovation

Saudi Arabia meeting water scarcity challenge with innovation
  • Kingdom is third biggest consumer per capita in the world, after US and Canada

RIYADH: Saudi Arabia’s National Water Co. (NWC) this month signed a $5.36 million two-year contract with a French utilities company to reduce the amount of water lost during the Kingdom’s water production process, known as non-revenue water in the industry.

This is a positive step forward, as a report released late last year by global consultancy firm Oliver Wyman found that while water usage is rising, supply is diminishing. The study estimated that 25 percent of the world’s population lives in areas that suffer extremely high water stress, and by 2050 that portion of the population will more than double.

“With water resources becoming increasingly scarce globally, the Middle East region is addressing the critical issues, with governments increasingly adopting new strategies for balancing their scarce water resources and growing demand for fresh water,” said Bruno Sousa, a partner in the Energy Practice at Oliver Wyman. “This has led some countries in the Middle East to turn to options such as desalination and
treatment, and reuse of wast water,” he added.

Saudi Arabia is the third biggest consumer of water per capita in the world, after the US and Canada. The Kingdom has implemented a series of measures to rationalize water consumption as part of its Vision 2030 program, with the aim of reducing consumption by 24 percent in 2021 and by up to 43 percent by the end of the decade.

The Saudi Ministry of Environment, Water and Agriculture has developed a unified water sector reference framework that includes a comprehensive water strategy, which integrates national water sector trends, policies, legislation and practices with the main objective of addressing these key challenges and restructuring the sector. Dr. Ibrahim Aref, director of the rehabilitation of agricultural terraces initiative at the ministry, told Arab News that most of the Arabian Peninsula’s water resources comes from rainfall. Yet, rainfall in the Kingdom, especially in the center of the Arabian Peninsula, is very weak compared to any other place in the world, thus causing water scarcity.

New technology has been developed over the years to minimize the environmental impact of desalination.

Bruno Sousa

Aref pointed out that even though the Arabian Peninsula, in general, experiences dry seasons that last for two, four or up to seven years, the Kingdom has been blessed with a strong economy and therefore has been able to work on many solutions that might be unusual elsewhere in the world, such as desalination.

According to Oliver Wyman’s Sousa, desalination can be achieved through two main technologies: Thermal and electric.

He told Arab News that thermal technology consists of heating water and collecting the resulting evaporated pure water. “This is a very energy-intensive process, requiring both electricity and thermal energy to heat the water. As part of the process, electricity is also generated that can be injected into the electric grid.

“Electric consists mainly in reverse osmosis, where water is forced through membranes that remove salt ... it is also an energy-intensive process, but only requires electricity to run,” he said.

“Although thermal desalination is still used, reverse osmosis is the mainstream technology, adopted mainly because of lower costs (including with energy) and a higher rate of potable water conversion from seawater,” he added. Sousa said that new technology has been developed over the years to minimize the environmental impact of desalination. Spanish firm Acciona last year completed the construction of the Al-Khobar I desalination plant in Saudi Arabia, and since Dec. 26, it has produced 210,000 cubic meters of drinking water per day, which will supply a population of 350,000. It is one of the biggest desalination plants in Saudi Arabia in terms of capacity.

Desalination is not the only way the Kingdom is looking to address the issue of water shortages. One of the largest programs being undertaken by the Ministry of Environment, Water and Agriculture is the rehabilitation of agricultural terraces in the southwest of the Kingdom.

The project aims to increase the efficiency of water use for agricultural purposes and to rely on renewable sources that contribute to food security, rural development and increased productivity of strategic crops.