Connect with us

Latest

British pound plunges to new low as tax cuts spark concern

Avatar photo

Published

on

British pound plunges to new low as tax cuts spark concern

LONDON (AP) — The British pound fell to all-time low against the U.S. dollar early Monday after Treasury chief Kwasi Kwarteng pledged a sweeping package of tax cuts, fueling concerns about the government’s economic policy as the United Kingdom teeters toward recession.

The pound fell as low as $1.0373, its lowest level since the decimalization of the currency in 1971, before rallying to above $1.08 in London early afternoon trading.

The weakening currency piles pressure on the U.K.’s new Conservative government, which has gambled that slashing taxes — and increasing borrowing to compensate — will spur economic growth. Many economists say it’s more likely to fuel already high inflation, push down the pound and drive up the cost of U.K. government borrowing — a potential perfect storm of economic headwinds.

Despite mounting concern, the government dug in its heels Monday.

“We’re not going to be commenting on daily market movements,” said the prime minister’s spokesman, Max Blain. “This is a plan for the medium to long term.”

The British currency has lost more than 5% of its value against the dollar since Friday, when Kwarteng announced the U.K.’s biggest tax cuts in 50 years.

The government plans to cut 45 billion pounds ($49 billion) in taxes as well as spend billions to help consumers and businesses struggling with high energy bills that are driving a cost-of-living crisis. The combination has sparked investor concern about spiraling government debt.

Kwarteng and Prime Minister Liz Truss, who took office three weeks ago, are betting that lower taxes and reduced bureaucracy eventually will generate enough additional tax revenue to cover government spending. Economists suggest it is unlikely the gamble will pay off.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Opposition Labour Party economy spokeswoman Rachel Reeves accused the government of “a return to trickle-down economics, an idea that has been tried, has been tested and has failed.”

“They are not gambling with their money — they are gambling with yours,” she told an audience at the party’s annual conference Monday.

The new and untested Truss, who replaced Boris Johnson as prime minister on Sept. 6, also faces pressure from a nervous Conservative Party, which faces an election within two years.

Some Conservatives have welcomed the tax-cutting moves as a return to free-market values after years of state intervention in the economy during the coronavirus pandemic. But others worry it is unconservative for the government to rack up huge debts that taxpayers will eventually have to pay.

Kwarteng insisted the government was acting responsibly — and said there were more tax cuts to come.

“We’ve only been here 19 days. I want to see, over the next year, people retain more of their income because I believe that it is the British people that are going to drive this economy,” he told the BBC.

As it is cutting taxes, the government plans to cap electricity and natural gas prices for homes and businesses to help cushion price rises that have been triggered by Russia’s war in Ukraine and have sent inflation to a near 40-year high of 9.9%.

This program will cost 60 billion pounds, and the government will borrow to finance it, Kwarteng said Friday.

He said Sunday that it was the right policy because the government needed to help consumers squeezed by the unprecedented pressures caused by the war in Ukraine and the pandemic.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Britain can afford the cost because its debt as a percentage of gross domestic product is the second lowest among the Group of Seven large industrial economies, Kwarteng said. He said the government would announce a “medium-term fiscal plan” for reducing the nation’s debt in the coming months.

Sterling is not the only currency showing weakness. The euro also hit a fresh 20-year low against the dollar as the war in Ukraine drives fears about recession and energy security ahead of the winter.

While the pound’s slide has accelerated in recent days, the currency has fallen steadily against the dollar for more than a year as investors sought the security of U.S. assets amid the global economic shocks.

The pound’s decline against the dollar also has been fueled by the Bank of England not keeping pace with the U.S. Federal Reserve’s efforts to rein in inflation. Britain’s central bank on Thursday raised interest rates by half a percentage point, compared with large three-quarter-point increase by the Fed last week. But U.K. inflation is the highest among major economies, and the bank predicted that Britain could already be in recession, which it defines as two consecutive quarters of economic contraction.

The bank’s rate-setting Monetary Policy Committee is not due to meet again until Nov. 3, but many economists say it may have to hike rates sooner if the pound’s slide continues.

Susannah Streeter, senior investment and markets analyst at financial services firm Hargreaves Lansdown, said it was difficult to know how low the pound could fall.

“It depends, I think, now on what the Bank of England does in response to sterling’s most recent fall,” she said. “There’s been this dramatic loss of confidence in the government’s economic management. But now the ball is in the Bank of England’s court.”

Read More

Advertisement
Submit your 2022 Austin Neighborhood Feedback
Continue Reading
Advertisement
Click to comment

Latest

Israel hails ‘success’ after blocking unprecedented attack from Iran

Avatar photo

Published

on

Israel hails ‘success’ after blocking unprecedented attack from Iran

TEL AVIV, Israel (AP) — Israeli leaders on Sunday credited an international military coalition with helping thwart a direct Iranian attack involving hundreds of drones and missiles, calling the coordinated response a starting point for a “strategic alliance” of regional opposition to Tehran.

But Israel’s War Cabinet met without making a decision on next steps, an official said, as a nervous world waited for any sign of further escalation of the former shadow war.

The military coalition, led by the United States, Britain and France and appearing to include a number of Middle Eastern countries, gave Israel support at a time when it finds itself isolated over its war against Hamas in Gaza. The coalition also could serve as a model for regional relations when that war ends.

“This was the first time that such a coalition worked together against the threat of Iran and its proxies in the Middle East,” said the Israeli military spokesman, Rear Adm. Daniel Hagari.

One unknown is which of Israel’s neighbors participated in the shooting down of the vast majority of about 350 drones and missiles Iran launched. Israeli military officials and a key War Cabinet member noted additional “partners” without naming them. When pressed, White House national security spokesman John Kirby would not name them either.

But one appeared to be Jordan, which described its action as self-defense.

“There was an assessment that there was a real danger of Iranian marches and missiles falling on Jordan, and the armed forces dealt with this danger. And if this danger came from Israel, Jordan would take the same action,” Jordanian Foreign Minister Ayman al-Safadi said in an interview on Al-Mamlaka state television. U.S. President Joe Biden spoke with Jordan’s King Abdullah on Sunday.

The U.S. has long tried to forge a regionwide alliance against Iran as a way of integrating Israel and boosting ties with the Arab world. The effort has included the 2020 Abraham Accords, which established diplomatic relations between Israel and four Arab countries, and having Israel in the U.S. military’s Central Command, which oversees operations in the Middle East and works closely with the armies of moderate Arab states.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

The U.S. had been working to establish full relations between Israel and regional heavyweight Saudi Arabia before the Oct. 7 Hamas attack sparked Israel’s war in Gaza. The war, which has claimed over 33,700 Palestinian lives, has frozen those efforts due to widespread outrage across the Arab world. But it appears that some behind-the-scenes cooperation has continued, and the White House has held out hopes of forging Israel-Saudi ties as part of a postwar plan.

Just ahead of Iran’s attack, the commander of CENTCOM, Gen. Erik Kurilla, visited Israel to map out a strategy.

Israel’s military chief, Lt. Gen. Herzi Halevi, on Sunday thanked CENTCOM for the joint defensive effort. Both Jordan and Saudi Arabia are under the CENTCOM umbrella. While neither acknowledged involvement in intercepting Iran’s launches, the Israeli military released a map showing missiles traveling through the airspace of both nations.

“Arab countries came to the aid of Israel in stopping the attack because they understand that regional organizing is required against Iran, otherwise they will be next in line,” Amos Yadlin, a former head of Israel’s military intelligence, wrote on X, formerly Twitter.

Israel’s defense minister, Yoav Gallant, said he had spoken with U.S. Defense Secretary Lloyd Austin and that the cooperation “highlighted the opportunity to establish an international coalition and strategic alliance to counter the threat posed by Iran.”

The White House signaled that it hopes to build on the partnerships and urged Israel to think twice before striking Iran. U.S. officials said Biden told Israeli Prime Minister Benjamin Netanyahu that Washington would not participate in any offensive action against Iran.

Israel’s War Cabinet met late Sunday to discuss a possible response, but an Israeli official familiar with the talks said no decisions had been made. He spoke on condition of anonymity because he was discussing confidential deliberations.

Asked about plans for retaliation, Hagari declined to comment directly. “We are at high readiness in all fronts,” he said.

“We will build a regional coalition and collect the price from Iran, in the way and at the time that suits us,” said a key War Cabinet member, Benny Gantz.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Iran launched the attack in response to a strike widely blamed on Israel that hit an Iranian consular building in Syria this month and killed two Iranian generals.

By Sunday morning, Iran said the attack was over, and Israel reopened its airspace. Iran’s president, Ebrahim Raisi, claimed Iran had taught Israel a lesson and warned that “any new adventures against the interests of the Iranian nation would be met with a heavier and regretful response from the Islamic Republic of Iran.”

The foes have been engaged in a shadow war for years, but Sunday’s assault was the first time Iran launched a direct military assault on Israel, despite decades of enmity dating back to the country’s 1979 Islamic Revolution.

Iran said it targeted Israeli facilities involved in the Damascus strike, and that it told the White House early Sunday that the operation would be “minimalistic.”

But U.S. officials said Iran’s intent was to “destroy and cause casualties” and that if successful, the strikes would have caused an “uncontrollable” escalation. At one point, at least 100 ballistic missiles were in the air with just minutes of flight time to Israel, the officials said.

Israel said more than 99% of what Iran fired was intercepted, with just a few missiles getting through. An Israeli airbase sustained minor damage.

Israel has over the years established — often with the help of the U.S. — a multilayered air-defense network that includes systems capable of intercepting a variety of threats, including long-range missiles, cruise missiles, drones and short-range rockets.

That system, along with collaboration with the U.S. and others, helped thwart what could have been a far more devastating assault at a time when Israel is already deeply engaged in Gaza as well as low-level fighting on its northern border with Lebanon’s Hezbollah militia. Both Hamas and Hezbollah are backed by Iran.

While thwarting the Iranian onslaught could help restore Israel’s image after the Hamas attack in October, what the Middle East’s best-equipped army does next will be closely watched in the region and in Western capitals — especially as Israel seeks to develop the coalition it praised Sunday.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

In Washington, Biden pledged to convene allies to develop a unified response. Secretary of State Antony Blinken said the U.S. would hold talks with allies. After an urgent meeting, the Group of Seven countries unanimously condemned Iran’s attack and said they stood ready to take “further measures.”

Israel and Iran have been on a collision course throughout Israel’s war in Gaza. In the Oct. 7 attack, militants from Hamas and Islamic Jihad, also backed by Iran, killed 1,200 people in Israel and kidnapped 250 others. Israel’s offensive in Gaza has killed over 33,000 people, according to local health officials.

Hamas welcomed Iran’s attack, saying it was “a natural right and a deserved response” to the strike in Syria. It urged the Iran-backed groups in the region to continue to support Hamas in the war.

Hezbollah also welcomed the attack. Almost immediately after the war in Gaza erupted, Hezbollah began attacking Israel’s northern border. The two sides have been involved in daily exchanges of fire, while Iranian-backed groups in Iraq, Syria and Yemen have launched rockets and missiles toward Israel.

___

Federman reported from Jerusalem. Associated Press writers Zeke Miller and Michelle L. Price in Washington; Amir Vahdat in Tehran, Iran; Samy Magdy in Cairo; Omar Akour in Amman, Jordan; and Giada Zampano in Rome contributed to this report.

Read More

Continue Reading

Latest

How to get rid of NYC rats without brutality? Birth control is one idea

Avatar photo

Published

on

How to get rid of NYC rats without brutality? Birth control is one idea

New York lawmakers are proposing rules to humanely drive down the population of rats and other rodents, eyeing contraception and a ban on glue traps as alternatives to poison or a slow, brutal death.

Politicians have long come up with creative ways to battle the rodents, but some lawmakers are now proposing city and statewide measures to do more.

In New York City, the idea to distribute rat contraceptives got fresh attention in city government Thursday following the death of an escaped zoo owl, known as Flaco, who was found dead with rat poison in his system.

City Council Member Shaun Abreu proposed a city ordinance Thursday that would establish a pilot program for controlling the millions of rats lurking in subway stations and empty lots by using birth control instead of lethal chemicals. Abreu, chair of the Committee on Sanitation and Solid Waste Management, said the contraceptives also are more ethical and humane than other methods.

The contraceptive, called ContraPest, is contained in salty, fatty pellets that are scattered in rat-infested areas as bait. It works by targeting ovarian function in female rats and disrupting sperm cell production in males, The New York Times reported.

New York exterminators currently kill rats using snap and glue traps, poisons that make them bleed internally, and carbon monoxide gas that can suffocate them in burrows. Some hobbyists have even trained their dogs to hunt them.

Rashad Edwards, a film and television actor who runs pest management company Scurry Inc. in New York City with his wife, said the best method he has found when dealing with rodents is carbon monoxide.

He tries to use the most humane method possible, and carbon monoxide euthanizes the rats slowly, putting them to sleep and killing them. Edwards avoids using rat poison whenever possible because it is dangerous and torturous to the rodents, he said.

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Some lawmakers in Albany are considering a statewide ban on glue boards under a bill moving through the Legislature. The traps, usually made from a slab of cardboard or plastic coated in a sticky material, can also ensnare small animals that land on its surface.

Edwards opposes a ban on sticky traps, because he uses them on other pests, such as ants, to reduce overall pesticide use. When ants get into a house, he uses sticky traps to figure out where they’re most often passing by. It helps him narrow zones of pesticide use “so that you don’t go spray the entire place.”

“This is not a problem we can kill our way out of,” said Jakob Shaw, a special project manager for People for the Ethical Treatment of Animals. “It’s time to embrace these more common sense and humane methods.”

Two cities in California have passed bans on glue traps in recent years. On the federal level, a bill currently in committee would ban the traps nationwide.

“It ends a really inhumane practice of managing rat populations,” said Jabari Brisport, the New York state senator who represents part of Brooklyn and sponsored the bill proposing the new guidelines. “There are more effective and more humane ways to deal with rats.”

Every generation of New Yorkers has struggled to control rat populations. Mayor Eric Adams hired a “rat czar” last year tasked with battling the detested rodents. Last month, New York City reduced the amount of food served up to rats by mandating all businesses to put trash out in boxes.

While the war on rats has no end in sight, the exterminator Edwards said we can learn a lot from their resilience. The rodents, he said, can never be eradicated, only managed.

“They’re very smart, and they’re very wise,” he said. “It’s very inspiring but just — not in my house.”

Read More

Advertisement
Submit your 2022 Austin Neighborhood Feedback

Continue Reading

Entertainment

Coachella: Earthquake shakes SoCal desert during music fest

Avatar photo

Published

on

Coachella: Earthquake shakes SoCal desert during music fest

RIVERSIDE, Calif. (AP) — A small earthquake shook the Southern California desert Saturday near Coachella, where the famous music festival is being held this weekend. No damage or injuries were reported.

The quake, with a preliminary magnitude of 3.8, hit at 9:08 a.m. about 8 miles (13 kilometers) northeast of Borrego Springs in Riverside County, according to the U.S. Geological Survey.

The epicenter was about 20 miles (32 kilometers) southeast of Coachella. It struck at a depth of about 7 miles (11 kilometers), the USGS said.

A dispatcher with the Riverside County Sheriff’s Department said there were no calls reporting any problems from the quake.

Read More

Continue Reading