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US Headlines Special 3: The Outcome
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1 February 2016 |
As with every other week, immigration is capturing the headlines across the world. In America, immigration is a topical debate as presidential candidates align themselves with certain views and Obama’s actions in 2014 are being brought to question. Beginning with the latter, Reuters reports how ‘in 2014, Obama bypassed the Republican-controlled Congress to issue an executive order to shield more than 4 million undocumented immigrants from deportation and offer them work permits, but he was blocked by court challenges from Republican-governed states.’ Reuters explains that if Obama’s actions are approved this could lead to ties with the Hispanic people which would enable inroads to be made. However, it appears that current candidates for the elections including ‘front-runners Donald Trump and Ted Cruz’ are both seeking a ‘crackdown on illegal immigration, with Trump promising to build a wall along southern U.S. border with Mexico.’
In other immigration news, Denmark has recently passed a new controversial immigration law. Sky News reports that asylum seekers will have their assets seized in order to ‘pay for their stay while their claims are processed.’ These actions are in attempt to stop migrants coming to Denmark however, nations around the world have reacted with great shock with some comparing the actions to the Nazis in the Holocaust.
The Guardian this week has also shared an interesting article about the impact of immigration. Focusing on the UK, the newspaper presents different views about whether there is a correlation between the housing issues in the UK and immigration. It explains that in 2012 Theresa May suggested that ‘more than a third of all new housing demand in Britain was caused by immigration. “And there is evidence that without the demand caused by mass immigration house prices could be 10% lower over a 20-year period.”’ With much of the negativity surrounding immigration stemming from issues such as these, it is interesting to hear that whilst many believe that immigrants consume social housing preventing natives from receiving help, the majority of migrants actually rent in the private property sector. Moreover, Filipa Sa, a Labour economist and academic argues that ‘crucially, new immigration to an area may lower the average local income, and decrease both housing demand and supply: immigration often leads to an outflow of natives, leading to a lower demand for housing.’ As the campaign for Britain to remain in the EU takes off this information will be very much appreciated by in-campaigners.
The topic has not changed as the issue remains. Big businesses and high powered individuals are now getting involved and pledging their alliance to either side of the campaign. Reuters reports on how ‘Britain’s trade unions are close to joining the push to keep the country in the European Union, bringing grass-roots muscle to a fight that has so far been dominated by big business and bankers, the head of the country's largest union group said.’ As big businesses get involved it appears that the issues are heating up as the potential threat for the vote to swing either way is causing fret. The Guardian offers another twist to the story as it presents that issue over whether the UK should be punished for leaving the EU. Hence, this suggests that Cameron, whilst he attempts to secure a deal to stay within the European Union will find it extremely difficult to secure a good deal if Britain chooses to leave. The Guardian explains that if a Brexit occurs than the European Union will likely use it as an example to try and deter other nations and nationalist parties from holding a similar vote within their country. ‘The UK was also warned many of the freedoms the UK would achieve as a result of being outside the EU would prove to be a mirage since free trade agreements, the movement of workers and the conduct of UK financial services would still be subject to either direct or indirect EU influence’ reports the Guardian.
Doom and gloom remains. The latest reports portray how the UK economy has grown once again in the last quarter of 2015; however, whilst initially any element of growth may appear positive, when examining the situation in perspective the situation does not appear too merry. The BBC reports how ‘The UK economy grew at its slowest rate since mid-2013 in the three months to January, according to the CBI.’ As a result, when the Bank of England release its inflation report this week on Thursday, Carney’s pledge to keep interest rates at the same rate will undoubtedly remain. Moreover, the BBC suggests through numerous reports that ‘the Bank of England will this week cut its UK economic growth forecasts to around 2.3% for 2016, compared with 2.5% in November.’ The question is what can we do to improve growth?
Did Cameron really secure a good deal? UK Prime Minister David Cameron and UK Chancellor George Osborne appear to be delighted describing it as a ‘success’. This has caused uproar from the public and in particular small to medium sized businesses. Google have managed to secure a deal with HMRC for £130 million, however, it is believed that this is only a small proportion of what they should have paid. Hence, the UK accounts for ‘around 10% of Google's global revenues, but the tech giant says UK profits, which is how corporation tax is calculated, are low’ report the BBC. UK Shadow Chancellor John McDonnell has called for the release of the details of how the deal was formed.
In other business news, Iran has agreed to buy ‘buy 118 Airbus planes worth $25bn (€22bn; £17.4bn) at list prices in one of the biggest deals signed since Western sanctions against Tehran were lifted’ reports the BBC. However, this deal will only be passed providing US approval as 10% of the parts come from the US. For more information read the BBC news article.
…It once again hits the headlines. Following the bond issue of ABInBev it has now been reported that the brewer will no longer need the historic loan of $75 billion which it managed to secure. Therefore, it has cancelled according to Reuters $42.5 billion. This has been accomplished not only through the $47 billion raised from ‘the net proceeds from a $46 billion bond insurance’ but also the ‘$1.47 billion Formosa deal.’ It is interesting to see how this deal has been financed through both debt and equity.
Michael Schuman writes a report for Bloomberg this week confirming and suggesting worldwide fears concerning a Chinese financial crisis. The Beijing based journalist suggests that the combination of the weakening currency and the political leadership are causing doubts amongst investors which are unlikely to dissolve quickly as the solutions which the Chinese government are enforcing are very short term.
On the other side of the Pacific in America, the economic situation does not appear to be as stable as one predicted at the end of 2015. The rising interest rates may have led the world into a false sense of security about how the health of the US economy. This is partly due to the over-supply of oil in the market which has led to ‘oil major Chevron (CVX.N) report[ing] its first quarterly loss in more than 13 years’ according to Reuters. Although some companies have managed to report increases much of this has been achieved through cuts in costs.
The impact is being felt! A couple of weeks ago we reported that BP are cutting thousands of jobs and now the Guardian reports that BP are expected to announce a 70% collapse in profits. The Guardian explains that ‘the headline figures will be [in an] even worse once one-off charges are included’ and that ‘City energy analysts predict the British oil company will report that earnings in the last quarter of 2015 fell to $730m (£514m), from $2.2bn a year earlier.’ With the continuing fall in oil prices, will this become a trend amongst other oil producers and suppliers?