Key events
On US election, Lagarde says Europeans must be strong
ECB president Christine Lagarde was also asked about this year’s US elections. And after a quick swig of coffee, she replies:
“We have to be strong as Europeans and not assume that we can rely on whoever our friends are around the world, because that can change.”
European Central Bank president Christine Lagarde has told Davos delegates this morning tht the ECB is likely to cut interest rates in the summer.
In an interview at Bloomberg House here, Lagarde was asked whether there was enough support on the ECB’s governing council for a cut.
Lagarde says:
“I would say it’s likely too.
But I have to be reserved, because we are also saying that we are data dependent, and that there is still a level of uncertainty and some indicators that are not anchored at the level where we would like to see them.”
Lagarde cautioned that the battle to bring inflation down to 2% in the eurozone has not been won – the annual CPI index rose to 2.9% in December.
Some ECB policymakers, such as Portugal’s central bank governor Mario Centeno, have said inflation is still moving in the right direction. But others are more hawkish – Austria’s Robert Holzmann warned this week that the ECB might not cut rates at all in 2024.
On this split, Lagarde says
“You’ve talked to some of them, they have spoken recently, and each of them has their view, which I respect completely.
“We generally coalesce towards the decisions that we make on the basis of data. Some of them have their local domestic data, they have their respective inflation rates, which are different from one country to the other.”
Amitabh Behar, interim executive director of Oxfam, is in Davos this week, warning that it woud be “heart-wrenching” if the world were to have a trillionaire while there are 800 million people sleeping hungry.
As poverty worsens for five billion people and 800 million people go hungry, Davos folks have kept on perpetuating the myth that billionaires will save the world. Now the first trillionaire is on the way.
Kudos @oxfam’s @AmitabhBehar for saying this: pic.twitter.com/yptsc56xqE— Ben Phillips (@benphillips76) January 17, 2024
Oxfam predicted on Monday that the world could have its first trillionaire within a decade…
UK inflation rises to 4%
Richard Partington
Back in the UK, inflation has risen unexpectedly,
The Office for National Statistics said annual inflation as measured by the consumer prices index (CPI) rose from the 3.9% reading in November, halting a period of recent declines.
City economists had forecast a modest fall to 3.8%.
In the year to December 2023:
▪️ Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 4.2%, the same rate as November.
▪️ Consumer Prices Index (CPI) rose by 4.0%, up from 3.9% in November.
➡️ https://t.co/U8NcxMkdgt pic.twitter.com/Do6AJgHNmx
— Office for National Statistics (ONS) (@ONS) January 17, 2024
The increase in the annual rate was largely the result of a government increase in tobacco duty, after the government announced higher taxes in the autumn statement. Tobacco prices rose by 16% on the year, as the cost of buying alcohol and tobacco added the largest contribution to inflation since 2006.
More here:
Tax our wealth, super-rich tell politicians at Davos
Rupert Neate
More than 250 billionaires and millionaires are demanding that the political elite meeting for the World Economic Forum in Davos introduce wealth taxes to help pay for better public services around the world.
“Our request is simple: we ask you to tax us, the very richest in society,” the wealthy people said in an open letter to world leaders, adding:
“This will not fundamentally alter our standard of living, nor deprive our children, nor harm our nations’ economic growth. But it will turn extreme and unproductive private wealth into an investment for our common democratic future.”
The rich signatories from 17 countries include Disney heir Abigail Disney; Brian Cox who played fictional billionaire Logan Roy in Succession; actor and screenwriter Simon Pegg; and Valerie Rockefeller , an heir to the US dynasty…
A message that chimes well with the Green Party’s call for a wealth tax this morning… More here:
Greens push for wealth tax on the super rich
The Green Party is challenging Labour to commit to a wealth tax, during Rachel Reeves and Jonathan Reynolds’ visit to Davos this week.
Green Party co-leader Adrian Ramsay said:
“When she attends the World Economic Forum in Davos today, Rachel Reeves will be rubbing shoulders with the super-rich who are seeing their wealth mushroom while billions around the world get poorer. Since 2020 the five richest men have added around £11 million per hour to their wealth while seven out of ten of the world’s biggest corporations have a billionaire CEO or a billionaire as their principal shareholder.
“Labour have been hesitant to challenge the grotesque levels of wealth of the super-rich. The Green Party has a clear message for the World Economic Forum: we are proud to be the Party willing to tackle inequality and implement the policies needed to create a fairer greener planet. That’s why we support the introduction of a wealth tax on the super-rich and we challenge Labour to use the platform they have at Davos to commit to the same.”
Introduction: Rachel Reeves pitches business leaders in Davos
Good morning from Davos, where the second day of the World Economic Forum’s Annual Meeting is getting under way.
The Labour Party are launching a charm offensive to corporate leaders in Davos today.
Shadow chancellor Rachel Reeves and shadow business secretary Jonathan Reynolds are hosting a breakfast hosted by the US investment bank JP Morgan this morning.
They’ll be telling CEOs, incuding the heads of Novo Holdings, Essar Group and Ericsson, that Labour will “restore Britain’s reputation as a place to do business”, if they win the next election.
Reeves will be pushing the ‘securenomics’ concept which she presented to last autumn’s party conference, contrasting it with “14 years of stagnant economic growth and political uncertainty” under the Conservatives.
She’s expected to explain that we are living in a new age of insecurity, saying:
The world has become a more uncertain, volatile and dangerous place. That has become ever more acute in recent days and weeks as we see wars and conflict in Europe and the Middle East.
“These conflicts are happening thousands of miles away from Britain’s shores. However, they are having a very real impact closer to home, with rising energy bills, higher prices in the shops and businesses anxious about disruptions to global trade.
“All major economies are being impacted by these global shocks, but Britain has been uniquely exposed. Fourteen years of stagnant economic growth and political uncertainty has left Britain weaker: the chaotic departure from the European Union, the turmoil under Liz Truss and now the managed decline with Rishi Sunak. This instability has turned businesses away, damaged our reputation and made us a less attractive place to do business.”
And on Labour’s strategy, Reeves will explain that business investment is at the heart of our plan for growth, pledging:
“With Labour, Britain will be open to business. We will restore stability and security into our economy. We will restore Britain’s reputation as a place to do business. And we will be a trusted partner with business in delivering the change our country and our economy needs.”
Later in the day, Reeves will speak on a panel organised by the World Economic Forum on Modern Supply-Side Economics.
After yesterday’s focus on Ukraine, including a call for support from Volodymyr Zelenskiy, attention will turn more to the Middle East crisis today.
We’ll hear from US secretary of state Anthony Blinken, UN secretary general António Guterres, and Iran’s foreign affairs minister, Hossein Amir-Abdollahian.
Overnight, Iran has launched airstrikes on Pakistan territory, apparently aimed at a Sunni militant group, in the latest sign of a wave of violence rolling across the Middle East and beyond.
Later in the day, Argentina’s president Javier Milei and French leader Emmanuel Macron will both give special addresses to delegates.
The agenda
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10am CET / 9am GMT: A Conversation with Antony Blinken, US Secretary of State
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10.45am CET / 9.45am GMT: Special Address by António Guterres, Secretary-General, United Nations
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11.30am CET / 10.30am GMT: A panel discussion on “Preparing for Disease X”, including Tedros Adhanom Ghebreyesus, Director-General of the World Health Organization and Michel Demaré, chair of AstraZeneca
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1.30pm CET / 12.30pm GMT: A Conversation With Hossein Amir-Abdollahian, Minister of Foreign Affairs of the Islamic Republic of Iran
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2pm CET / 1pm GMT: A discussion on “Ukraine: Unity of Purpose”, with Dmytro Kuleba, Ukraine’s Minister of Foreign Affairs, and David Cameron, UK foreign secretary
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2.15pm CET / 1.15pm GMT: A Conversation with Mohammad Mustafa, Chairman, Palestine Investment Fund
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3.45pm CET / 2.45pm GMT: Special address by Javier Milei, President of Argentina
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5.15pm CET / 4.15pm GMT: Special Address by Emmanuel Macron, President of France
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5.30pm CET / 4.30pm GMT: A discussion on Modern Supply-Side Economics: Two Years On, with Rachel Reeves
