UK mulls interest rate cut; Ford warns of gloomy outlook; Food crisis for 10,000 Indians laid off in Saudi Arabia

1 UK mulls interest rate cut (Katie Allen in The Guardian) The Bank of England is expected to cut interest rates for the first time since the financial crisis this week and lower its UK growth forecasts by the biggest margin on record, in response to the uncertainty caused by the EU referendum result.

The Bank’s monetary policy committee will announce a decision on Thursday, when the latest inflation report and growth forecasts will be published. If interest rates are cut, it will be the first time they have changed since being set at 0.5% in March 2009.

The MPC held off reducing official borrowing costs from their record low in the immediate aftermath of the Brexit vote on 23 June. However, the committee has dropped heavy hints that it will act this week when fresh forecasts for the economy are published. Mark Carney, the Bank’s governor, warned before the referendum that voting to leave could push Britain into a recession.

The Bank’s forecasts are expected to include an unprecedented downgrade of the prospects for the British economy. In May’s inflation report, it forecast that the economy would grow by 2.3% this year, but economists believe this could now be slashed to less than 1%, which would be the largest downgrade in the Bank’s forecasts between inflation reports since it became independent in 1997.

2 Ford warns of gloomy outlook (Khaleej Times) Ford has warned that it could miss its 2016 profit forecast due to a plateauing of auto sales in the US market and slower economic growth.

Ford, which had described the first quarter of 2016 as “absolutely terrific,” offered a much more subdued outlook as it cautioned that higher incentives in the critical North American market could dent profitability.

“We are committed to meeting our guidance but it is at risk,” Ford chief financial officer Bob Shanks said. “We don’t see growth, at least in the near term.” The bleaker outlook came after Ford reported an 8.8 percent drop in second-quarter earnings to $2 billion. Revenues rose 6.0 percent to $39.5 billion.

Ford joined some other industry experts who have said the American auto market will have trouble topping the record of 17.5 million cars sold in 2015, a peak in a multi-year boom supported by strong sales of sport utility vehicles and other large autos.

3 Food crisis for 10,000 Indians laid off in Saudi Arabia (BBC) More than 10,000 Indian nationals laid off in Saudi Arabia are facing a “food crisis”, India’s foreign minister says. Sushma Swaraj said “large numbers” of Indians had lost their jobs in the kingdom, leaving them with not enough money to buy food.

The Indian community in Jeddah, with the government’s help, has distributed food to those in need at the weekend. Growth has slowed in Saudi Arabia as the country suffers the effect of lower oil prices.

Ms Swaraj appealed on Twitter for the three-million-strong Indian community in the country to “help your fellow brothers and sisters”. A government minister is travelling to Saudi Arabia, Ms Swaraj said. He is expected to help with arrange an airlift of laid-off Indians who are unable to afford the air fare home.

Reports in India said 800 Indian workers had lost their jobs at Saudi Oger, a large Saudi-Lebanese construction company. In the past, Human Rights Watch has criticised Saudi Arabia for “rampant employer abuses of migrant workers, including forcing them to work against their will or on exploitative terms”.

Workers laid off in Kuwait were also suffering food shortages, Ms Swaraj said, but the situation there was more manageable, she added.


About joesnewspicks

This blog captures interesting news items from around the world for those strained by information overload and yet need to stay updated on global events of significance. The news items displayed are not in order of merit. (The blog takes a weekly off — normally on Sundays — and does not appear when I am on vacation or busy.) I am a journalist for nearly three decades.
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