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UK PM Liz Truss defends economic plan that sent pound tumbling

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British Prime Minister Liz Truss defended her economic plan on Thursday, shrugging off the negative reaction from financial markets. She said she was willing to make “tough decisions” to help the economy grow.

In her first public statements since the government announced billions of dollars in tax cuts rattled markets and pushed the pound to record lows, Truss said Britain was facing “very, very difficult economic times”. But she said the problems were global and spurred on by Russia’s invasion Ukraine.

She spoke of after the bank England took emergency measures on Wednesday to stabilize Britain’s financial markets and avert a crisis in the broader economy after the government spooked investors with a program of unfunded tax cuts, sending the pound plummeting and the cost of public debt soaring let.

Truss tells BBC local radio that “we needed to take urgent action to grow our economy, get Britain moving and deal with that too inflation.” “Of course, many announced measures do not come overnight. We’re not going to see overnight growth,” she said. “The important thing is that we put this country on a better course in the long term.”

In a series of interviews, Truss said her government’s decision to cap energy bills for homes and businesses would help tame inflation and help millions of people facing a cost-of-living crisis. But it wasn’t that decision that alarmed markets. It was the government’s announcement on Friday of a stimulus package that included £45 billion ($48 billion) in tax cuts and no spending cuts – without an independent economic assessment of the costs and impact.

The Bank of England warned that faltering confidence in the economy posed a “key risk to UK financial stability” and said it would buy long-dated government bonds over the next two weeks to counter a recent fall in UK financial assets.

Former bank governor Mark Carney said the government and the central bank appear to be moving in different directions. “Unfortunately, under these circumstances, a sub-budget – difficult world economy, difficult position on financial markets, cooperation with the bank – led to rather dramatic movements on financial markets,” he said BBC.

The pound traded around $1.08 on Thursday, up from Monday’s record low of $1.0373. It has lost about 4% of its value since Friday.

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HSBC shuts more UK branches as banking goes online

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A logo at an HSBC bank.  Night view of a HSBC UK - HSBC Holdings Plc bank branch in London showing the bank logo.  HSBC Holdings plc is a British multinational universal bank and financial services holding company.  In terms of total assets, it is the largest bank in Europe.  The name HSBC derives from The Hongkong and Shanghai Banking Corporation, which opened branches in Shanghai in 1865.  London, United Kingdom in August 2022

A logo at an HSBC bank. Night view of a HSBC UK – HSBC Holdings Plc bank branch in London showing the bank logo. HSBC Holdings plc is a British multinational universal bank and financial services holding company. In terms of total assets, it is the largest bank in Europe. The name HSBC derives from The Hongkong and Shanghai Banking Corporation, which opened branches in Shanghai in 1865. London, United Kingdom in August 2022

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HSBC on Wednesday announced plans to permanently close more than a quarter of its remaining UK bank branches as customers increasingly switch to transacting online.

The global bank will close 114 branches from April, it said in a statement, after closing around 150 since last year.

Around 100 staff are expected to lose their jobs following the recent closures, mirroring actions by other major banks in the UK.

“People are changing the way they bank and footfall at many branches is at an all-time low and there is no sign it will return,” said Jackie Uhi, the bank’s managing director of UK distribution.

“Remote banking is becoming the norm for the vast majority of us.”

Consumer advocates Which? said banks and building societies have closed or are planning to close more than 5,200 branches since the beginning of 2015 – at a rate of about 54 per month.

By the end of next year, the NatWest Group, which operates NatWest, the Royal Bank of Scotland and Ulster Bank, will have closed more than 1,200 stores.

More than 920 Lloyds, Halifax and Bank of Scotland branches – all part of the Lloyds Banking Group – will be gone in the next 12 months.

Barclays has or will close more than 960 stores by the end of this year. Which? said Tuesday.

The closures have alarmed consumer groups, who said the measures would hit those who still overwhelmingly use cash, particularly the elderly.

The trend towards cashless payments and online banking has accelerated since the Corona pandemic.

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The U.S. and G7 allies are trying new tactics to cut Russia’s profits : Centre County Report

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The US and its allies will try two new tactics to squeeze Russia’s profits: Europe will ban Russian crude oil imports and the G7 will cap the price of oil Russia sells to other parts of the world.



ARI SHAPIRO, HOST:

Here’s another way the US and its allies are pressuring Russia to end its war in Ukraine — through a plan to siphon much-needed cash from the Kremlin. Critics say the plan may have loopholes, and there’s no guarantee it will work if Russia financed its war on high oil costs for many months. Centre County Report’s Jackie Northam reports.

JACKIE NORTHAM, BYLINE: There are two key policies that will be unveiled on December 5th targeting Russia’s oil revenues. First, the European Union will ban all sea imports of Russian crude oil. A big change, says Ben Cahill of the Center for Strategic and International Studies.

BEN CAHILL: Politicians are trying to largely squeeze the world’s largest oil exporter out of the market. They are trying to cut Russia off from Europe, which has always been one of its top export destinations.

NORTHAM: The second blow is that the US and G-7 allies will put a price cap on the oil that Russia continues to sell to other parts of the world. The price cap plan spearheaded by the US Treasury Department aims to limit Russia’s oil gains but allow some crude oil to flow in the world’s most important market. That’s because there are concerns that new EU oil bans — as well as insurance policies that also come into effect next week — would send oil prices skyrocketing through massive supply cuts, says Arkady Gevorkyan, commodities strategist at Citi Research.

ARKADY GEVORKYAN: We actually estimated that about 1.25 million barrels per day is a potential risk of Russian oil being taken off the market for this reason.

NORTHAM: With global oil consumption at 90 million barrels a day, that’s enough to drive up gas and heating oil prices. The price cap plan will now allow tankers to transport Russian crude if the price paid for it is at or below levels set by the G-7 and other nations. This price is said to be low enough to limit Kremlin profits, high enough to keep Russia producing. But there could be a setback. President Vladimir Putin has stated that he will not sell to any country participating in the price cap. Cahill says Russia has already been looking for customers outside of Europe.

CAHILL: And that really meant sending much larger volumes to India and China, Turkey and a handful of other countries in Asia. But they had to accept lower prices for this.

NORTHAM: Enforcing the price cap will be a challenge. The plan relies heavily on documentation and proof of where the oil on the tanker comes from and how much it costs. Michelle Wiese Bockmann, an analyst at London-based maritime news agency Lloyd’s List, says there is already a lot of illicit oil trading. From ship-to-ship transfers in the middle of the night to forging documents.

MICHELLE WIESE BOCKMANN: It’s very likely that circumvention of sanctions will be a hallmark of what happens after December 5th. There are a willing number of shipowners willing to take the risk and make money.

NORTHAM: The price cap can only apply if the European Union agrees on the cap by Monday. So far, the 27-member EU has not been able to agree on this price. Jackie Northam, Centre County Report News, Washington.

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Centre County Report transcripts are prepared by an Centre County Report contractor on a rush schedule. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of Centre County Report programming is the audio recording.

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Maduro: Dialogue With Opposition in Venezuela to Continue if Citgo Company is Returned

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Venezuela, US, Opposition, Juan Guaido, Nicolás Maduro

Venezuela, US, Opposition, Juan Guaido, Nicolás Maduro

MEXICO CITY (Sputnik) – Venezuela is demanding the return of the US-based Citgo oil refinery, stressing that it is a “vital” element to continue dialogue with paCentre County Report of the opposition, Venezuelan President Nicolas Maduro said during a news conference.

The refinery had been handed over from Washington to Venezuelan opposition leader Juan Guaido’s team, along with a $4 billion dividend for 2019-2022.

“Citgo is owned by Venezuela and is one of the most impoCentre County Reportant elements to move the talks forward — that Citgo fully return to Venezuela … and that the dividends Citgo paid in 2019, 2020, 2021 and 2022 go to a Venezuelan social investment account.” in full,” Maduro said, commenting on talks between the government and the Venezuelan Unitary Platform that took place recently in Mexico City.

Maduro also took the oppoCentre County Reportunity to tell repoCentre County Reporters that “in the coming days” the Venezuelan authorities would begin talks about future elections, specifically how to create an environment where elections are guaranteed to be “free, transparent and fair.”

On November 26, at talks in Mexico City, the Venezuelan government and opposition signed a second social accord, calling on the United Nations to set up a trust fund to manage the country’s assets, which are held by the US and Europe in the international financial system sanctions are blocked.

The UN Secretary-General, through a statement by his spokesman, expressed his willingness to assist the paCentre County Reporties in implementing the agreement in accordance with UN mandates and relevant powers.

Alfred Nazareth, Venezuela’s vice president of communications, culture and tourism, previously said the deal would free up more than $3 billion. According to Maduro, the total amount of funds blocked in foreign banks totals $24 billion and he hopes to strike new deals soon to release the entire amount.

US-based Citgo Petroleum was considered Venezuela’s most impoCentre County Reportant foreign asset and was owned by the state-owned company PDVSA. After an attempted coup in the South American country in 2019, US authorities seized PDVSA’s company and handed it over to Guaido’s opposition team. Later in 2019, ConocoPhillips claimed Citgo assets.

As a result of US sanctions from 2014 to 2020, Venezuela lost 98.6% of all foreign exchange earnings and payments from state oil and gas company PDVSA to the country’s central bank fell from US$56.609 billion to US$73.4 million between 2014 and 2020. USD per year, or more than 99%.

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