Immigration

Immigration has been an issue that has been at the central of global political discussion in recent years. Over the last two weeks there has been even greater focus, in particular within Europe, as the negotiation over Britain’s relationship with the European Union is at the forefront of the debate. One of the main arguments to leave the European Union, in addition to Europe’s continuing economic problem, is the open door policy with regard to the free movement of people. Many argue that this is the reason why terrorists have been able to freely move across Europe. From a British perspective, the UK’s deal with France whereby the border control is based in Calais and not Dover might be at risk if the nation decides to leave the Union. Hence, this will place even greater pressure on the UK borders and the Home Office who over the past fortnight have faced much criticism for failing to meet border targets after approximate investment of £830 million into new systems over the past eight years. News regarding the reformation of Britain and Europe’s relationship is expected today.

Nonetheless despite criticism Brad McMillan, Chief investment officer of the US’ largest private owned independent broker, argues that the positive perspective is being lost in this sea of criticism. Taking a global stance by taking into consideration examples of Chinese, US and European policy with regard to immigration, he suggests that in twenty years countries will be fighting for immigrants. Using the example of Mexican immigration to America; a topic of debate in the American elections, he suggests that with an aging population in the US together with the lack of desire to farm, America is going to need more labourers in order to ensure that there are no agriculture shortages, a problem which he suggests will exist eventually throughout the western world. Hence, since the mid-2000s more Mexicans have left than enter America. This is very interesting following labour MPs suggestions that British Chancellor George Osborne’s plan to reach a budget surplus will only be possible by creating jobs for which migrants need to fill; Osborne however denies this claims. Nonetheless, only time will tell whether security or economic needs will take priority over the next decade or whether perspectives towards immigration will change.

Europe

Will the Eurozone economy ever recover from its recent ill-health? Will policy make any difference? These two questions are at the forefront of politicians, investors, strategists and the general public’s minds as the European Central Bank has had to increase its stimulus once again. Following its meeting on 3rd December 2015, the BBC reports how the deposit rate dropped overnight from -0.2 to -0.3% in attempt to ‘push banks to lend instead of parking money at the ECB’. The ECB has also decided to prolong its stimulus programme until March 2017 adding an extra 360 billion euros across the extra six months. Nonetheless, the main interest rate remains at 0.05%. These stimulus packages come following the Eurozone’s lack of inflation and weak growth rate.

The Telegraph reports on the grim outlook for Europe as it describes how ‘central bank watchers say that when the ECB does start to raise rates, we could have entered the next decade’. It also suggests that the Eurozone might actually face another recession as well during the next decade. Hence, the Eurozone has failed to recover following the world financial crash eight years ago and are continuously facing new problems as policy needs to be adapted as time endures. The Telegraph quotes the ECB’s chief economist who explains how unemployment has resulted in hysteresis effects meaning workers skills are out of date making them unemployable. Therefore is the ECB able to fix the Eurozone’s problems? Is there just one too many?

Business

The largest merger in UK history as well as the fourth greatest in global corporate history has sought approval from regulators the BBC reports. AB InBev is proposing to takeover SABMiller for £71bn. Nonetheless in order to ensure the deal, the sale of infamous beer brands including Peroni and Grolsch currently owned by SABMiller, might be demanded as regulators attempt to ensure competition within the market.

In other business news, Deutsche Bank is cutting costs again. The sale of its US private client services to Raymond James, a financial services group, provides evidence for its new business strategy which focuses on its core business.

Moreover, it is unsurprising to hear that another corporation is under investigation for tax. McDonalds activities within Europe is being examined as the BBC reports how the European Commission has found ‘two tax rulings given by the Luxembourg authorities in 2009 had allowed McDonald's Europe Franchising to pay no corporation tax in Luxembourg since then, despite recording large profits. It added that in 2013, McDonald's profits were more than €250m (£177m).’

UK Economy

Over the last fortnight the fallout of the autumn statement has been discussed as George Osborne continues with his aim of reaching a budget surplus by 2020. The Guardian in their report clearly summarises in twenty five points the consequences of the announcement. Particular attention should be given to the extra 3% on stamp duty for buy-to-let properties and second homes which ultimately will discourage some people from purchasing property. It would appear that ‘safe’ investments are no longer in existence as interest rates are so low, property prises are increasing and markets increasingly unstable.

Inflation rates are another topic of discussion with regard to the UK economy as manufacturing reports record lows with experts according to the Guardian expecting ‘the worst year for growth since 2009’ for manufacturing. This is believed to be because of the Chinese slowdown which has resulted in a slowdown in demand. The weak demand for manufacturing goods together with the strong sterling has meant that imports have been more attractive for the UK. Mark Carney, the head of the Bank of England has already suggested that changes in interest rates are unlikely to be seen before late next year; however will the weak manufacturing outlook hold back plans further?

In other UK economy news, the fallout for the future of Britain’s economy will be clearer this week as the European summit is held.

UK Politics

The question came and so did the answer- following the Paris attacks in November there has been great speculation as to whether Britain would join allies in striking against Syria. After much debate across Britain about what the country should do politicians last Wednesday voted to strike the Islamic State. The decision was made following a ten hour Commons debate which saw a vote of 397 to 233 in favour of military action. The debate saw a great applause for Hilary Benn, the shadow foreign secretary’s speech who encouraged, as the BBC reports, the Commons to ‘confront the evil’ and to fight against Isil who ‘held our democracy in contempt.’ Following the vote forces successfully struck Syria hours later with further attacks taking place on Friday aiming at the oil fields in Syria. There is much concern over this military intervention due to the potential of a ground war or further air strikes in Libya, a country who is facing threat from IS as it expands. The decision to bomb Syria however, also raises question about the UK political system. Many have argued that Cameron would not have called the vote unless he felt that he would win it. Critics of Cameron have stated that if the Prime Minister had given the opposition to air strikes more time to vote would be fairer. Hence, unlike Corbyn, Cameron did not give his party a free vote either, another thing which caused controversy. Is the political system out dated? Surely everyone should be given a free vote to decide what they want to do? It will remain to be seen whether the air strikes are effective, however, it appears following an attack at a tube station in London on Friday night that the Islamic State are ready to rebel against those striking against them.

Global News

The impact of China’s slowdown on world growth appears to not only be affecting the Western world but also the emerging economies. It is believed, reports the BBC, that in sub-Saharan Africa economic growth rates will slow to 3.8% according to the IMF which is the slowest since 1999. The BBC explains that this is because China is ‘a major source of finance for investment in new commodity extraction’ which ‘helped boost the international market price for African exports’.

Terrorism is one of the world’s current greatest threats with every major nation; US, Russia, France, Britain being struck, some significantly worse than others, following their mission to participate in air strikes against the Islamic State in Syria. President Obama today has called for ‘peace and national unity’ reports the New York Times. Obama argues that we need to play a ‘long game’. The Economist builds on the threat faced by terrorism in Europe when stating that ‘Brussels is not just Europe’s political and military capital—it is also the centre of its terrorist networks’. This report comes after discovery and raids of believed terrorists homes across Brussels as well as in France following the Paris attacks. The nations fighting the Islamic state are currently in talks and are believed to be building a coalition to fight through coordinating air strikes as well as a longer term plan.