The catch-up boom in China, India, Brazil is largely over and will be followed by a drastic slowdown over the next decade, according to a grim report by America’s top forecasting body. Europe’s prognosis is even worse, with France trapped in depression with near zero growth as far as 2025 and Britain struggling to raise its speed limit to 1 per cent over the next three Parliaments. The US Conference Board’s global economic outlook calls into question the “BRICs” miracle (Brazil, Russia, India, China), arguing that the low-hanging fruit from cheap labour and imported technology has already been picked. China’s double-digit expansion rates will soon be a romantic memory. Growth will fall to 6.9 per cent next year, then to 5.5 per cent from 2014-2018, and 3.7 per cent from 2019-2025 as the aging crisis hits and investment returns go into “rapid decline,” The Telegraph reports.
The UK Government may have to hand back as much as £5bn to £7bn in taxes to major UK-based companies after a European court found HM Revenue & Customs had breached EU rules. The judgment, handed down on Tuesday, threatens to open the floodgates for businesses to claim refunds that go back as far as 1973 and comes despite mounting public furore over tax avoidance by multinational companies. However, rather than seeing money returned, the ruling by the European Court of Justice means that HMRC now faces paying out billions of pounds to companies. British American Tobacco, along with other litigants thought to include BA’s pension fund scheme, have been fighting a class action lawsuit against HMRC both in the UK and in Europe since 2006. The claimants – which are headquartered in the UK – say they have been taxed unfairly by HMRC for decades, The Telegraph says.
Anglo American, the mining company hit by the resignation of its chief executive and continuing wildcat strikes at its South African operations, said costs at a large iron ore project in Brazil would be $2bn higher than expected. Shares in the company fell by 3.15 per cent to close at £17.70 on Tuesday, after Anglo American confirmed it now expected capital expenditure at its Minas-Rio development to exceed $8bn. The company’s shares have lost over a quarter of their value since the start of the year. The company said its board had commissioned an external report into the causes of the cost overrun and delays at the project. Poor progress there has long been seen as a blot on Anglo’s plans to lower its cost of production, The Financial Times explains.
Workers angry over austerity cuts and tax rises have launched a Europe-wide string of rallies and strikes on Wednesday, shutting transport, grounding flights and closing schools. General strikes in Spain and Portugal will spearhead a “European Day of Action and Solidarity” called by unions in the region. Unions in Greece and Italy also planned work stoppages and demonstrations against austerity policies, which labour leaders blame for prolonging and worsening the continent’s economic crisis. For Spain, the Eurozone’s fourth-largest economy where one in four workers is unemployed in a deep recession, it is the second general strike in eight months in protest against draconian budget cuts. Spain’s main CCOO and UGT unions have urged people to rally under slogans such as “They are taking away our future!”, deploying pickets during the night at airports, bus and railway stations, according to The Telegraph.
Millions of people fleeing violence in Syria will be left to face winter alone after aid agencies admitted that it was becoming too dangerous to provide relief across many parts of the country. The UN’s refugee agency (UNHCR) now expects that more than four million Syrians will be in need of emergency aid by next year. But the worsening crisis is forcing international non-governmental organisations (NGOs) to abandon thousands of desperate families, as more and more of the war-torn country becomes a no-go zone for aid-workers, The Times says.
The troublesome Russian oligarch partners of BP have bent, finally, to the will of the Kremlin and made peace with the British oil group. The four billionaires who make up the AAR consortium have called off their long-running $10bn legal action against BP over their TNK-BP joint venture. It is understood that BP paid $325m to the oligarchs in return for settling all outstanding disputes. AAR launched the action last year, claiming that BP had broken their shareholder agreement by excluding the joint venture from the British company’s proposed alliance with the Kremlin-controlled group Rosneft. AAR secured an injunction in the High Court blocking the alliance but claimed that TNK-BP had lost billions of dollars of future revenue by being denied the opportunity, The Times reports.