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Diplomatic row breaks out between the UK and the White House; UK retail sales decrease by 1.3%; 54 African states sign trade agreement

Diplomatic row breaks out between the UK and the White House; UK retail sales decrease by 1.3%; 54 African states sign trade agreement

9 July 2019

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Trade talks between the US and China are due to resume this week but there has been little progress of late, with both sides emphasising the existence of obstacles to any deal. Whilst the Washington-Beijing dispute is relatively quiet, a diplomatic row has broken out between the UK and the White House. Leaked emails showed that Britain’s US ambassador called the Trump administration “inept”, leading to the President refusing to deal with Sir Kim Darroch. 
European equity markets are lower across the board this morning, with the German DAX underperforming. This follows weaker Asian stock markets overnight amid reports that Japan and South Korea will hold talks this week regarding export restrictions imposed by the former on the latter. South Korean President Moon Jae-in has threatened countermeasures. 
Persistent fears over Brexit, trade and a global economic slowdown have led to a spate of pessimistic UK economic readings. Deloitte’s latest quarterly survey of chief financial officers revealed that corporate sentiment is at its lowest level for a decade amid subdued investment. 
The high street is not faring any better; the latest monthly retail sales data from the British Retail Consortium revealed that sales decreased by 1.3% in June and painted a “bleak picture”. Low consumer confidence is preventing rising real wages from translating into higher spending. Retail investors, however, have turned bullish on UK shares for the first time in two years, according to the Investment Association’s study of net asset flows. 
Greece’s new prime minister has cancelled MPs’ summer holidays in an effort to pass tax cuts and other reforms aimed at reviving the economy. Meanwhile, Eurozone leaders have reminded the new ruling party, New Democracy, of the importance of sticking to agreed fiscal targets. 
Finally, 54 African states have signed an agreement creating the world’s largest free trade area, a bloc that includes $2.5trn worth of economies. The African Continental Free Trade Area took almost 20 years to negotiate. 


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